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Richard Smoley's Blog


Usura rusteth the chisel
It rusteth the craft and the craftsman
It gnaweth the thread in the loom . . .
Usura slayeth the child in the womb
It stayeth the young man’s courting
It hath brought palsey to bed, lyeth
between the young bride and the bridegroom

—Ezra Pound, Canto XLV

The political and economic views of Ezra Pound, admirer of Mussolini, have long darkened this great poet’s reputation. Even so, his canto denouncing usury remains one of his most powerful achievements.

Usury is, of course, simply lending (money, usually) at interest. It is so inextricably interwoven into modern society that it is almost impossible to imagine life without it.

And yet, over the centuries, usury has attracted condemnation from an impressive number of sources. Aristotle in his Politics (1258b) writes that of means of gaining wealth, “the most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest.”

The Mosaic Law forbids usury among the children of Israel, though permitted it in regard to foreigners (Deuteronomy 23:19-20)—a provision that turned out to be both blessing and curse to the Jewish people in later centuries.

Dante places usurers in the seventh circle of his Inferno.

Muhammad forbade usury to Muslims, although today this prohibition is circumvented by permitting the lender to charge a “fee,” rather than interest, for a loan.

The medieval Catholic church forbade usury, giving a monopoly on this enterprise to the Jews. When the Protestant Reformers broke with the church, they, by contrast, permitted lending at interest—yet another instance of Max Weber’s link between the “Protestant ethic” and “the spirit of capitalism.”

The ban on usury puzzled me for a long time. We take it so much for granted; it seems only fair to permit some kind of return for the use of its money. Why was it seen as so evil?

I had something of an insight into it this morning, largely after reading “A Secret History of Money” by K.R. Bolton in a recent issue of New Dawn magazine (to which I owe the details mentioned above). Perhaps it seems obvious when I state it: forbidding usury discourages the excessive accumulation of wealth. If you were not permitted to charge interest on the money you lent, you might still make money lots of other ways—buying and selling property and so on. But merely sitting on your wealth would bring you no advantage whatsoever.

In such a case, a man would still reasonably want to accumulate some surplus of wealth, in whatever form, as a safeguard against future needs and emergencies. But there is a point at which this wealth is not going to do him any further good. Say you might want to have $5 million, which is certainly enough to provide for your children and guard against emergencies (e.g., a health problem of the sort that brings bankruptcy on many Americans today). But why would you want $10 million—if all that that money is going to do is sit in your house without any return? If you keep it in specie, as in the old days, it only increases your risk of getting robbed. If it sits in a bank as figures in an account, you don’t even have the satisfaction of holding it and counting it.

Thus, if no one is paid interest on his money, the accumulation of excess wealth starts to seem far less desirable.

Many would still want to accumulate great wealth, of course—otherwise gross inequities would have vanished in the societies where usury was forbidden. There are certainly some satisfactions in it: the power that comes along with it, the joy that comes from contemplating your possessions, the awe with which your property endows you among others. A ban on usury would not, and has not, made such things go away. It would simply put a damper on it.

Of course finance has become far more complicated since the days of Aristotle and the Deuteronomist. Neither of them, I would imagine, ever had to contend with the idea of negative interest rates and other such subtleties. And banking as we know it—where you hold one person’s money and pay him some interest for it, while charging a higher rate to someone who borrows the same money—was just being developed in Dante’s time.

I write all this not to denounce the present economic system—there are already plenty of people doing that—but simply as an exercise in contemplating how and why we might live without something we take so thoroughly for granted.

I've sometimes thought of writing about money, although some might disqualify me on the grounds that I have never made much of it. Certainly it is a mysterious, almost occult entity. What, from the point of view of everyday life, is more real than money? And yet it is completely evanescent and illusory. The stock market can drop, as it has several times in recent years, and a trillion dollars can simply vanish. This money never existed as gold or silver, not even as paper; it only existed as figures in the computer of some banks.

Such would explain some of the unease of modern times. Money is, to many people, the great reality, the only reality, but it can simply evaporate, for reasons that the experts do not understand as well as they would like to pretend. Yet another strand in the nest of illusions that we call waking life.

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