Tag Archives: moneylenders

Ten Economic Policies To Unite A Nation

29 May

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Regular readers will be well aware of my excoriating views on the practice of usury — the making of gain (profit) from money; the unnatural “birth of money from money”.

In this, I happily find myself to be in esteemed company.

With all the forefathers of Western thought and jurisprudence (Plato, Aristotle, Cato, Cicero, Seneca, Plutarch, et al).

With the religious divines of all times and places (Buddha, Moses, Vashishtha, Jesus, Mohammed, Aquinas, Luther, and many more).

And … with Adolf Hitler.

(Do I have your attention now?)

I have no doubt that very few, if any, Australian readers would know that the central plank in the economic policy platform of The National Socialist German Workers’ Party, was the abolition of usury.

That following the devastating impacts of losing World War I, the crushingly punitive war reparations imposed by the Treaty of Versailles, and the resultant hyperinflation of the Weimar Republic, the economic policies introduced by the NSDA on coming to power inspired what is arguably the greatest, and most rapid economic transformation of a nation in modern history.

Or that — if we choose to first set aside our conditioned prejudices, and consider the matter with cool impartiality — we will discover that many of us would support precisely the same economic policies, in response to the economic challenges of our own times.

Before we get to those policies, let us first consider the following commentary/introduction by Pedert Gottfried in “The Program of the NSDA”, The National Socialist German Workers’ Party and its General Conceptions, translated by E.T.S. Digdale, Fritz Eher Verlag, Munich, 1932.

Read without prejudice.

I have included underlines for emphasis:

Adolf Hitler prints the Party Program’s two main points in leaded type: “The Common Interest Before Self: The Spirit of the Program” and, Abolition of the Thralldom of Interest: The Core of National Socialism.” Once these two points are achieved, it means a victory of the approaching universalist ordering of society in the true state over the present-day separation of state, nation and economics under the corrupting influence of the individualist theory of society as now constructed.

The sham state of today, oppressing the working classes and protecting the pirated gains of bankers and stock exchange speculators, is the area for reckless private enrichment and for the lowest political profiteering; it gives no thought to its people, and provides no high moral bond of union. The power of money, most ruthless of all powers, holds absolute control, and exercises corrupting, destroying influence on state, nation, society, morals, drama, literature and on all matters of morality, less easy to estimate.

Break down the thralldom of interest” is our war cry. What do we mean by thralldom of interest? The landowner is under this thralldom, who has to raise loans to finance his farming operations, loans at such high interest as almost to eat up the results of his labor or who is forced to make debts and to drag the mortgages after him like so much weight of lead.

So is the worker producing in shops and factories for a pittance, whilst the shareholder draws dividends and bonuses which he has not worked for. So is the earning middle class, whose work goes almost entirely to pay the interest on bank overdrafts.

Thralldom of interest is the real expression for the antagonisms, capital versus labor, blood versus money, creative work versus exploitation. The necessity of breaking this thralldom is of such vast importance for our nation and our race, that on it alone depends our nation’s hope of rising up from its shame and slavery; in fact, the hope of recovering happiness, prosperity and civilization through out the world. It is the pivot on which everything turns; it is far more than a mere necessity of financial policy. Whilst its principles and consequences bite deep into political and economic life, it is a leading question for economic study, and thus affects every single individual and demands a decision from each one: Service to the nation or unlimited private enrichment. It means a solution of the Social Question.

Our financial principle: Finance shall exist for the benefit of the state; the financial magnates shall not form a state within the state. Hence our aim to break the thralldom of interest.

Relief of the state, and hence of the nation, from its indebtedness to the great financial houses, which lend on interest.

Nationalization of the Reichsbank [central bank] and the issuing houses [commercial banks], which lend on interest.

Provision of money for all great public objects (waterpower, railroads etc), not by means of loans, but by granting non-interest bearing state bonds or without using ready money.

Introduction of a fixed standard of currency on a secured basis.

Creation of a national bank of business development for granting non-interest bearing loans.

Fundamental remodeling of the system of taxation on social-economic principles. Relief of the consumer from the burden of indirect taxation, and of the producer from crippling taxation.

Wanton printing of bank notes, without creating new values, means inflation. We all lived through it. But the correct conclusion is that an issue of non-interest-bearing bonds by the state cannot produce inflation if new values are at the same time created.

The fact that today great economic enterprises cannot be set on foot without recourse to loans is sheer lunacy. Here is where reasonable use of the state’s right to produce money which might produce most beneficial results.

Let it be clearly understood, gentle reader, that my statement of agreement with the above is just that.

Agreement with the above. In particular, with the underlined passages.

Hence, a polite request.

Please do not insult my intelligence, and more importantly, your own, by falsely conflating my agreement with the above, with any contrived notion or implication that this somehow also constitutes an approval — tacit, or otherwise — of any other words (much less, actions) of the German state of the 1930’s – 1940’s.

I have one observation to make in that regard.

And it is this.

It is entirely possible — indeed, it is exceedingly common — for a person (and by extension, a nation) to be right in principle, but wrong in practice.

Which is why I condemn the (a)moral code, cherished by power-hungry sociopaths of all stations in life, which asserts that “the Ends justify the Means”.

*************

It may now be of interest to the discerning reader, to consider thoughtfully and without prejudice the first of the economic policy demands listed in the NSDA’s 25 point “Program” of 1932 (underline added):

Therefore we demand:

11. That all unearned income, and all income that does not arise from work, be abolished.

Breaking the Bondage of Interest

12. Since every war imposes on the people fearful sacrifices in blood and treasure, all personal profit arising from the war must be regarded as treason to the people. We therefore demand the total confiscation of all war profits.

13. We demand the nationalization of all trusts.

14. We demand profit-sharing in large industries.

15. We demand a generous increase in old-age pensions.

16. We demand the creation and maintenance of a sound middle-class, the immediate communalization of large stores which will be rented cheaply to small tradespeople, and the strongest consideration must be given to ensure that small traders shall deliver the supplies needed by the State, the provinces and municipalities.

17. We demand an agrarian reform in accordance with our national requirements, and the enactment of a law to expropriate the owners without compensation of any land needed for the common purpose. The abolition of ground rents, and the prohibition of all speculation in land.

18. We demand that ruthless war be waged against those who work to the injury of the common welfare. Traitors, usurers, profiteers, etc., are to be punished with death, regardless of creed or race.

20. In order to make it possible for every capable and industrious German to obtain higher education, and thus the opportunity to reach into positions of leadership, the State must assume the responsibility of organizing thoroughly the entire cultural system of the people. The curricula of all educational establishments shall be adapted to practical life. The conception of the State Idea (science of citizenship) must be taught in the schools from the very beginning. We demand that specially talented children of poor parents, whatever their station or occupation, be educated at the expense of the State.

21. The State has the duty to help raise the standard of national health by providing maternity welfare centers, by prohibiting juvenile labor, by increasing physical fitness through the introduction of compulsory games and gymnastics, and by the greatest possible encouragement of associations concerned with the physical education of the young.

Would you be inclined to support any of these economic policies, here in our own times?

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Great Minds Discuss How To Fix The Banking System For Good

3 May

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Near the conclusion of my essay explaining an alternative solution to the global financial crisis (The People’s NWO: Every Man His own Central Banker), I pointed to an October 2010 speech by the central Bank of England governor, Mervyn King.

In that speech, King suggested that the world should “divorce the payment system from risky lending activity – that is … prevent fractional reserve banking (for example, as proposed by Fisher, 1936, Friedman, 1960, Tobin, 1987 and more recently by Kay, 2009)”.

My warning then, was that the elite string pullers of the present global financial system appear to be planning their own “solution” to the crisis; one that is particularly cunning and dangerous. Why? Because often it is not falsehoods, but the deceitful mis-use of truth that is the most dangerous to our well-being.

The “solution” being canvassed by the world’s economic, academic, and banking elite does appear to address one (1) fundamental structural flaw that most of the “sound money” and “anti-bankster” activists correctly identify and oppose – fractional reserve banking, or, the creation of “credit” out of thin air by banks, in the form of loans-at-usury.

To recap, this is what I wrote on 7/7/11 in reference to Mervyn King’s suggestion that the world should now “prevent fractional reserve banking”:

Their current plan to address the fear of global systemic banking risk – a fear which they have created through control of the boom-and-bust “cycle”, of which the GFC is only the most recent example – is to divorce the transactional currency system from the store of wealth system.

This is precisely what my idea would achieve … without the centralised control.

We need to understand the true and proper nature of “money”, and “currency”. So that we are not hoodwinked by the next stage of the global bankster scam.

Many are aware of the evils of “fractional reserve banking”. And it is these who will be the first to sing “Hallelujah!” and fall for the trap, when TPTB suggest doing away with fractional reserve banking as a “solution” to the global systemic banking crisis that they have created.

Well, it appears that I was right.

(More correctly, Dave Harrison was right.)

From Positive Money, one of those well-meaning activist groups who I fear are just the kind to fall for the trap being prepared, and thus naïvely serve as “useful idiots” in supporting a deceptively appealing proposal to “fix” the problems of the global money system, without removing the two greatest problems of all (usury, and central control by elite bankers), we learn that:

A very interesting conference took place on 17th April 2013 in Philadelphia, USA.  Big senior figures in the economic, monetary, and financial worlds, including Adair Turner, Laurence Kotlikoff, Michael Kumhof and Jeffrey Sachs were discussing fundamental solutions to current global monetary and banking problems.

This was probably the first conference ever where the top academics were seriously discussing ending fractional reserve banking.

Now you can watch the recording of their presentations, highly recommended:

If the video doesn’t play on your browser, please click here.

Michael Kumhof, Deputy Division Chief, Modeling Unit, Research Department, International Monetary Fund, explained in very clear and straightforward way how exactly banks work and presented the Chicago Plan proposal.

“The key function of banks is money creation, not intermediation. And if you tell that to a mainstream economist, that’s already provocative, even though it’s hundred percent correct.”

His presentation starts at 1:02:12

Adair Turner, Former Chairman of the UK Financial Services Authority and Senior Fellow at the Institute for New Economic Thinking, gave a noteworthy presentation on “Money and Debt: Radical Solutions to the Challenge of Deleveraging”

“Fractional reserve banks create whole new level of danger. Because the fundamental fact is, that when people say  ”banks take savings and intermediate it to loans” – that’s not true.

One of the most fundamental insight is that banks simultaneously create new credit and new money ex nihilo.

And that is one of the most fundamental, important things for people to be taught, which economics undergraduates should be taught about the nature of how monetary economy with banks works.”

His presentation starts at 4:06:07

Jeffrey Sachs, Director of The Earth Institute, Quetelet Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, on Implications for Global Development 

“Could we really have liquidity without fractional reserve banking? If we could, we might be able to address another degree of this problem.”

His presentation starts at 2:35:08

In the opinion of your humble blogger, herein lies great danger.

What these lauded men are saying here … is the Truth.

This is how the world’s modern “money” system works.  Most people in the world do not understand that this is how it really works. And yes, the power of banks to create endogenous money via the fractional reserve system is dangerous, risky, and profoundly flawed, and does lie near to the root of the world’s financial troubles.

The great danger here rests in the fact that so many intelligent, well-meaning activists and opponents of the present global financial system are certain to applaud and support the act of stating these truths, and as a result, be lulled into a false sense of security – the idea that these “truth-tellers” must therefore be “honest brokers”, whose proposed solution to the problem they (now) highlight is the best solution for all of us.

And not just the best solution for them.

I will state the case bluntly, dear reader.

The only way that humanity can ever be truly freed from the power of the moneylenders, and the only way for “money” to be rendered a true servant of humanity rather than our master, is for usury – the taking or offering of any interest on “money” – to once again be outlawed.

And for the power of issuing “currency” to be maximally de-centralised.

See also:

The People’s NWO: Every Man His Own Central Banker

The World’s Most Immoral Institution Tells You How

A May Day Economic Jeremiad For All Ages

On Savages, Barbarians, And Money-Lenders

A Tale Of Usury, Explosions, And A Used Car Salesman

Usury – The Golden Age Of Big Money Oligarchy

A History Of The Legal Case Against Usury

Conspiracy Theorists Proved Right: Everything Is Rigged

A History Of The Legal Case Against Usury

24 Feb
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Schistosoma mansoni is an endoparasite that lives in human blood vessels.

Regular readers will know that I am an ardent opponent of the practice of usury.

In the classical meaning of the word.

Indeed, it is my view that the practice of usury is The Key to the power of the money-lenders.

While many others have argued that the key to their power is their exclusive right to create money (debt) whenever they make a loan, I tend to disagree.

In the absence of the legal right to charge interest (usury) on those loans, the money-lenders’ power would be effectively nobbled.

They could be replaced by full public banking. Or by alternate, free currency solutions like my own.

This key issue of the charging of interest on “money” lending, its origins, and its legal history, is awash with myths, theories, distortions, and outright falsehoods.

There are many eloquent and brilliant advocates for the alleged “need” for the charging (and offering) of a rate of usury on money. The theory of the so-called “time-value of money” is commonly cited in justification of what is, in truth, plain and simple parasitism –

Parasitism is a non-mutual relationship between organisms of different species where one organism, the parasite, benefits at the expense of the other, the host.

First used in English 1539, the word parasite comes from the Medieval French parasite, from the Latin parasitus, the latinisation of the Greek παράσιτος (parasitos), “one who eats at the table of another” and that from παρά (para), “beside, by” + σῖτος (sitos), “wheat”. Coined in English in 1611, the word parasitism comes from the Greek παρά (para) + σιτισμός (sitismos) “feeding, fattening.”

What I hope to do in today’s post is dispel some of the banking industry’s most powerful falsehoods.  That the charging (and offering) of “interest” on money is normal. That, at worst, it is a “necessary evil”.  That it is really something natural, and good, like a law of the universe, and vital to keeping our world turning.

I also hope to encourage readers to STOP using the banksters’ language.

And instead, to “call each thing by its right name.”

The original word used for the charging of interest on money … is USURY.

Usury does not mean charging “excessive” rates of interest.

The etymology of the word “usury” shows that it originally meant the charging of any interest, at all:

usury (n.)

c.1300, from Medieval Latin usuria, from Latin usura “usury, interest,” from usus, from stem of uti (see use (v.)). Originally the practice of lending money at interest, later, at excessive rates of interest.

How very convenient for the modern day money-lenders, that we have changed our language over the centuries.

No doubt with more than a little help from our “friends”.

In researching for more information on the origins of the word “usury”, recently I happened across an article published in the American Bar Association Journal, Volume 51, September 1965. It was written by a J.L. Bernstein, NYU Law School graduate and editor-in-chief of the New York State Bar journal. Following are some extended excerpts. It really is fascinating stuff.

But if you are tempted to leave before finishing, please do me one favour. Skip to the end, and read my closing observations concerning ancient Sumeria, the true origin of debt jubilees and New Year’s Eve celebrations, and the deeper meaning behind the Biblical story of Abraham.

Now, to the history of the legal case against usury (my bold emphasis added):

Background of a Gray Area in Law: The Checkered Career of Usury

Tracing the ancient and medieval history and development of usury, Mr Bernstein shows that at first it was any charge for the use of property, but later became only the charge of excessive interest on money. With the advent of our present consumer society, various procedures and methods of conditional selling have enabled what might otherwise be usury to escape illegality. It is time, the author suggests, to delineate what is fact and what is fiction in this shadowy world.

A CASE MAY BE MADE for usury as one of the oldest professions of man, yet the complexities of modern economic life “make fundamental a review” of the problem, as the late C.S. Lewis, Oxford and Cambridge don, scholar and theologian pointed out. The checkered career of usury cum interest is too long to detail here, but this mixed question of theology and law has always been a gray area for the courts – a veritable hodgepodge of legal decision, as this Journal once put it, with “no clearcut rationale”.

Even an elementary statement in a leading New Jersey case is questionable. The Supreme Court said: “Although the common law did not prohibit usurious exactions, our statutes have done so since 1738.” This view of the common law is challenged in Mark Ord’s authoritative Essay on the Law of Usury (1809), which states: “Usury in its strict and legal sense was always considered unlawful.” Likewise, Robert Buckley Comyn says: “Usury was in England an object of hatred and legal animadversion at least as early as the time of Alfred; and Glanville, Fleta, and Bracton bear ample testimony to the abhorrence in which it was held.”

All Interest Once Was Usury

At common law a usurious contract could not be enforced, and usury appears to have been an indictable offense, the punishment for it being fines and imprisonment. The fact is that from the earliest recorded times until the later Middle Ages even interest was forbidden by both canon and civil law, for interest then was synonymous with usury. Indeed, interest had no significant usage in English law until the statute of 21 Jac. 1, c. 17 (1624), although it had been employed in commerce, having been adapted from the Justinian Code of the Roman Empire.

The Lombard merchants, the principal moneylenders of medieval times, had made it a practice to charge a penalty on default, and the custom spread. Thus interest was not a charge for the use of money, but an exaction to make the creditor “whole”. In time it came to mean permissible usury, but it is noteworthy that neither the Old nor the New Testament recognizes this concept, except for the new Catholic edition of the Holy Bible (1954) which substitutes interest for usury and banker for exchanger.

Comyn describes the gradual transformation: “Usury was an offense which having first become odious from religious prejudices, at length became the object of political consideration, and parliamentary restraint. And as at first the taking of any profit upon money was denominated usury, so afterwards, when such profit was authorized by law, the profit was termed interest, and the illegal excess alone retained the odious name.” Thus usury began as malum in se, but at least from the time of Charlemagne in the ninth century (he considered all profit as “filthy lucre”), the secular arm had sought to reinforce the spiritual, making it also malum prohibitum. Speaking of the earliest English statutes, those of Henry VII (1487-1495), Coke declared that all usury was “damned and prohibited”. According to an ancient book of the Exchequer, entitled Magister et Tiburiensis, usury was ranked with murder as an offense.

But the general detestation was diminished by 37 Hen. 8, c. 9 (1545) which, while entitled “A Bill Against Usury”, tacitly legalized it to a maximum of 10 per cent per annum. This statute inaugurated the serviceable fiction that usury no longer meant any interest, but only excessive interest. As Ord puts it, this was the first English statute to “give any connivance to the practice of lending at interest”.

The statute still called usury “a thing unlawful”; it was an attempt at moderation, following the lead of the church. Earlier attempts to ban all interest had failed ignobly, but so did this new approach, and by 5 & 6 Edward 6, c. 20 (1552), repeal made interest and usury one and the same again. But this didn’t work, as before, and 13 Eliz. 1, c. 8 (1571) repealed the Edwardian edicts and revived the statute of Henry VIII. In order, 21 Jac. 1, c. 17 (1624); 12 Car. 2, c. 13 (1660); and 12 Anne, c. 16 (1713), toyed mainly with the rates, which went from a maximum of 10, to 8, to 6 and finally to 5 per cent in the statue of Anne of 1713. This is the one followed in this country. But the most common maximum rate of 6 per cent is derived from the Justinian Code.

The statute of 12 Anne, which served as a common model here, was abrogated 110 years ago in England by 17 & 18 Vict., c. 90 (1854). Therefore, the mother country has no general usury law today and interest of 48 per cent may be quite legal – even more, if the courts can be convinced. As H. Shields Rose puts it in his book, The Churches and Usury (1908), this was “the final capitulation of the state … as regards the maintenance of a legal maximum rate of interest in England”.

Note:  The abrogation of this 183-year-old English law placing limits on the charging of interest, came just ten years after the privately-owned Bank of England was granted exclusive power to issue the nation’s banknotes (Bank Charter Act, 1844). Coincidence? I think not.

The etymology of usury is from the Latin words usa and aera, meaning “the use of money”. But both by ecclesiastical and civil law it was always held that usury could exist in nonpecuniary transactions as well. Many state statutes, following the language of 12 Anne, speak generally of “money, wares, merchandise, goods and chattels”. The Bible is more inclusive: “Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.”

But courts that maintain that usury was not prohibited by the common law are on firmer ground if they mean thereby the common law as it was interpreted by the colonial judges here. Blackstone says that the common law of England consists of “That ancient collection of unwritten maxims and customs …”. Our early courts seemed to regard English authority on the subject so dubious, indifferent or contradictory that, without legislative enactment, anything by way of usury was legal. This led to such abuses that the colonists petitioned for action, and general usury statutes were adopted everywhere.

It is useless to deny that confusion abounded in the common law, for usury was no less a gray area and a hodgepodge of thinking then. Coke, for example, said that: “All usury is not only against the law of God [but] the laws of the realm, and against the law of nature.” But on another occasion he avers that what was actually forbidden was “biting usury”, i.e., unconscionable charges…

Note: It is your humble blogger’s firm opinion that, in a technological age where 97% of all “money” is no more than electronic binary code, mere digital bookkeeping entries, created at the click of a bankers’ mouse in the form of new debt, there is no question that ALL usury charges are unconscionable.

Genesis of the Problem Is of Ancient Origin

But if the common law is no less a puzzle than our decisional law, the trouble goes far back – to Holy Writ itself. Until the later Middle Ages all interest was interdicted, for it was abhorrent that money – “barren” as Aristotle and the inspired writers of the early Church had taught – should increase unnaturally while lying fallow. That a lender should profit in his own idleness and that a borrower should be charged even though he may have lost money in the transaction, both were intolerable. Indeed, the worst form of usury in medieval times is considered a most respectable practice in our own. This was the custom of paying interest from the day of the loan. Banks today not only pay interest “from the date of deposit”, but even from before, so that money deposited by the fifteenth of a month will draw interest from the first.

Note how the author first refers to “paying interest from the day of the loan”, then immediately switches gears to speak of banks paying interest “from the day of deposit”? This is a classic and oh so subtle mind trick, commonly used in justification of the practice of charging interest on lending. How so? By redirecting the focus of the argument on the fact that banks pay interest as well.  It is a clever distraction, because what is overlooked, is that banks never pay more interest than they charge. As a so-called “intermediary” in the payments system of the economy, the banks achieve the easiest of profits.  Not just because they charge more interest than they pay, which in itself would be a form of parasitism. But because they are not mere intermediaries – banks are able to create money (debt), and charge interest on it.  Contrary to popular belief, banks do not simply lend out money deposited by other customers. See The World’s Most Immoral Institution Tells You How

We have come a long way in our view of the fertility of money. But, oddly, the statute of James I, which gave the word interest its first significance in Anglo-Saxon law, contained the proviso that “… no words in this statute contained shall be construed or expounded to allow a practice [of charging interest] in point of religion or conscience”. But what did morality actually hold? That is the most vexatious of all inquiries.

The Fifteenth Psalm is clear without cavil: “Lord, who shall abide in thy tabernacle? Who shall dwell in thy holy hill … He that putteth not out his money to usury…”. Throughout the Bible the angry prophets denounce what the early theologians called “horrible and damnable sinne”. But there are also loopholes born of contradiction, and the frustrations of the moralists came to be visited upon the jurists.

Although the quoted passage from Deuteronomy forbids all usury, the next verse is most tantalizing: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury…”. What does this mean?

Indeed. There is much that can be said, and much evidence raised, in answer to that question.  But we will leave that particular controversy for another time.

From Biblical times until the later Middle Ages, a moneylender was simply a usurer, and a banker an exchanger. The distinction of moderate usury, called interest, received no recognition in the Church until after the Reformation. In a sense, therefore, the liberalization of religious thought also marked the turn to the “Money Society”, in which the medium of exchange achieved the status of a commodity of intrinsic value and became the lifeblood of commerce. The burgeoning materialism of the age, trading on the discovery of the New World, was in a mood no longer to tolerate philosophical and religious thought treating money as “infertile” and profit from it as “unnatural”, since it was not endowed by God or nature “with genital and procreative faculties” in the words of St. Basil (fourth century). In the end, it was the lawgiver, Justinian, who prevailed, rather than the philosophers and theologians.

And there you have it. What has ultimately prevailed with respect to usury, is the code of man. The Corpus Juris Civilis of the “lawgiver”, Justinian, a ruler of the late Roman Empire (c. 529AD), are the foundational documents of the Western legal tradition. It is ancient Roman law that serves as legal justification for the resurrected, and globally-dominating practice of usury in our day.

Theory of Moderate Usury or Interest Is Approved

This same logic, that there is nothing immoral about usury, was advanced in Parliament in the last century during the debates on the proposed abolition of the general usury statute of 12 Anne. “God did not so hate it, that he utterly forbade it”, contended one member; while another stated: “He could not have desired that the ban against all usury should be of moral and universal application”, for the Bible did not so clearly provide. An economist with the United States Treasury Department even advanced the view that usury could be traced “to the Creator Himself”, who first caused “all things to grow and increase”.

Nevertheless, that the total prohibition of all interest was at the center of canonist doctrine until the later Middle Ages is clear. “Not until sixteen hundred years after Christ did interest find any defenders”, proclaimed Roger Fenton. Then it was the Church which led the way to its acceptance, and the State which followed. Two principal reasons may be advanced for it: (1) the growing power of economic forces which chafed under enforced unselfishness and (2) the equivocations of Scriptures which encouraged the casuistries of “permissible instances”. Ultimately, perhaps, it was a hopeless struggle against human cupidity, or maybe only against “progress” for it is unlikely that, no matter what position it assumed, the Church could have stemmed the tide that was running.

Assailed on either side by those who, like St. Basil, called usury “the last pitch of inhumanity” and those who found it out of harmony with the facts of life, the Church sought to steer a middle course. Since its primary object has always been to protect the weak against the economically strong, it saw justifications for exceptions in commercial transactions between sophisticated parties.

“Sophisticated” parties? Now where have we heard that justification used more recently?

Moreover, on the allegation that, after 16 centuries, the Church succumbed to the pressures of economic greed and “progress”, it behooves one to point out that, in doing so, its ecclesiastical leaders and learned theologians all managed to lose sight of the simplest teachings of their own namesake, The Christ: 

“No one can serve two masters: Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”

It is this blogger’s view that the vast, unfathomable wealth of “the Church” – the sheer obscenity of which induced a sense of nausea on his sole tour of the Vatican – stands as ample testimony to the identity of which “master” it has long chosen to serve.

“Interest”, laconically comments Roger Fenton, “is the brat of commerce.” By what Mark Twain would have called “theological gymnastics” the Church has been charged with acquiescing in contrivances and subterfuges; and its capitulation to usury – limited or otherwise – has been held to constitute a virtual abdication of the precept against avarice, a former “venal” sin.

The Church first approved the idea of interest as it originated in the Justinian Code, which implied a justified penalty on default, although it is likely that this in itself was a subterfuge to avoid the ban against usury. But theological approval of the dammum emergens, for actual loss incurred, was not satisfactory to business or its lawyers, who argued also for the lucrum cessans, certain gain lost. This the Church resisted for at least a century more, for it was not ready to concede that money, the love of which is “the root of all evil” in the Bible, was fertile. But in time it acceded to this, provided that the money was lent for an initial gratis period. Thus, technically, the interest was still not for the use of money, but as compensation for its nonreturn on the due date.

This attempt at charity led to an ingenious evasion. The grace period, accepted with high good humor in the market place, became a mere sham. The lenders merely fixed a due date so close that borrowers could not hope to repay by then, following which huge penalties were added. The evasion and the practice survive to this day, and the courts commonly enforce, after default, a rate of charge in excess of that permitted by general usury laws. It persists in “revolving” or “flexible” charge accounts, in which no charge is made if a bill is paid within ten days or so, after which interest (called a “service charge”) of 18 per cent is added.

But the Church never approved of lending to the poor in order to profit from their poverty, nor of such things as “consumer’s loans”, formerly called “consumptive loans”, a rather more descriptive phrase. Indeed, to lend for any but productive purposes or to engage in commerce except as a service to the community was still immoral. In 1515 the Lateran Council pronounced: “This is the proper interpretation of usury, when gain is sought to be acquired from the use of a thing not in itself fruitful, without labor, expense or risk, on the part of the lender.” The element of risk loomed larger in importance, but the Church having made distinctions, it was not long before the law of England followed suit. Within thirty years, in 1545, came 37 Hen. 8, the first statute to legalize moderate usury.

Today it is commonly argued that the charging of interest on loans simply represents a fair and reasonable “rate of return” to moneylenders, to compensate them for their “risk” in making the loan.

This is self-serving bunkum.

As we have seen previously, there is no labor or “risk” involved in the modern process of “money” creation and lending. It is simply typed into existence, as a new digital bookkeeping entry. And even when the moneylenders take their money debt-creation schemes to stratospheric levels, blowing asset bubbles that lead to the total insolvency not just of millions of common people, but of their own institutions – (eg) the predatory mortgage lending practices in the USA preceding the GFC – the government conspires with the bankers to make them “whole” again. In the modern era, it is perfectly clear and beyond refutation that the lending of money by the banking system is risk-free … for the bankers.

In closing this post on usury, there is one more piece of research I’d like to share.

Biblically-literate readers will be familiar with the story of Abraham. As the man chosen by God to be “the father of many nations”, he is a central figure in the history of three powerful world faiths and their billions of adherents. Indeed, they are named after him – the “Abrahamic” faiths of Christianity, Islam, and Judaism.

In the Genesis 11-12 account of Abraham, we learn that he lived in the region of ancient Sumeria (or Babylonia), in a place called “Ur of the Chaldees”. God told him to get out of Ur, and to go to a land that He would show him.

The Promised Land.

A metaphor for Heaven.

In David Graeber’s masterful work Debt: The First 5,000 Years, we learn a wealth of fascinating, myth-busting information on the true anthropological history of money, exchange, barter, and debt throughout recorded history. It is a “must read” book.

Many of us would be aware that the earliest written records of humankind are the clay tablet (cuneiform) writings from ancient Sumeria. The concept of a debt jubilee now being revived by Professor Steve Keen has its earliest origins in Sumeria/Babylonia, where actual “money” (eg, coins) was very little used; instead, the economy functioned almost entirely on a system of debts and credits, which (like today) were nothing more than bookkeeping entries, written originally on clay balls, later, on clay slates. The phrase “a clean slate”, meaning to have a fresh start or new beginning, has its origins here. New Year’s Eve celebrations also have their origins here – it was not uncommon practice for Sumerian kings to declare all debts annulled, to destroy all the records of debt and so begin with “a clean slate” in the new year; a cause for joyous celebration if ever there was one!

CunEnv

In chapter 7 of Graeber’s book, we also discover the meaning of the word “Ur,” from an early Sumerian dictionary:

ur (HAR): n, liver; spleen; heart; soul; bulk; main body; foundation; loan; obligation; interest; surplus; profit; interest-bearing debt; repayment; slavewoman.

I think there may well be a significance to the story of Abraham and his journey out of Ur to the Land of Promise, that is both far deeper, and far more practical, than most give it credit for.

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