Chapter 18 - A Few Thoughts on Usury

Usury is a term that is not used commonly in the modern world. In times past, it was the name of a sin. To most people, it was a crime. Dante considers usurers to belong to inner ring of the seventh circle of hell. Jain in 1929 had these harsh words: "It is Usury - the rankest, most extortionate, most merciless Usury - which eats the marrow out of the bones of the raiyat [cultivators] and condemns him to a life of penury and slavery" [181]

Quite conveniently, for those wishing to practice usury, the term 'interest' came to replace the word 'usury'. The definition of usury has also suffered. Previously usury was lending at any rate of interest. The definition was gradually softened to mean lending at an excessive rate of interest or an illegal rate of interest. With the advent of credit cards and payday loans, usury rates in excess of 20% are not uncommon, and no furore occurs. An interest rate of 20% is considered 'normal'. So those that think that an interest rate of 5% might be acceptable are not shouting about interest rates of 20%. You have to look quite hard to find a Christian pastor discussing the difference between 5% and 20% interest rate. The Muslims are much more vocal on the subject. Please try a search on YouTube for "riba". The early arguments in Europe, around 500 years ago were along the lines that 'moneylending at low rates of interest assisted business and trade'. In the words of Alister E. McGrath: "the lending of money at interest was essential to the emergence of modern capitalism." This required a softening on the stand taken by the church in Europe. As the church opposition to usury relaxed, the practice of usury increased. This is the likely cause of the modern era of capitalism that has brought with it the need to work hard and the need to produce more products in a more efficient manner. However, it is also brought in a level of personal, national and international debt of a level never seen before on the planet. The debts have become so huge that there is actually insufficient money in the world to pay off the debts. A worldwide Impossible Contract has been created. The lending system is supported by an advertising system that encourages consumer, personal, automotive and housing debt. This lending system also encourages an economic academia that follows economic texts that support the system of usury. The banking system encourages governments to use their superior money payment system without the politicians being aware that they have joined a closed-loop money system that will generate a majestic National Debt that is ultimately unpayable. The media talking heads suggest that the debt is the fault of the politicians without realising that no policy or procedure exists that could ever nullify the National Debt.

The Magic of Usury

To add further lunacy, modern moneylenders, called banks, are reluctant to lend to businesses and a high proportion of lending is in the form of mortgages, personal loans, car loans and credit card usury. Much of the lending is for the purpose of speculation which pushes up land prices which makes business less price competitive.

As borrowing has become normalised and socially acceptable, citizens have been persuaded away from using government currency (cash) to using Bank Credit, with its associated debt and interest payments.

We can possibly say that there are three types of borrowers. There is the borrower who can make a profit from the use of the borrowed money. There is also the borrower that borrows for personal indulgence, which we could term as consumption. There is the borrower that borrows through desperation often with no hope of ever repaying. It is the second borrower and third borrower that are likely to fall prey to the usurer. It is this consumer that is likely to have problems with the inability to pay. There is likely to be a reason for the inability to pay which may be illness or loss of income. However, the very nature of usury in a closed loop money system means that the debts magnify to exceed the money lent. So the rate of failure amongst the citizens will approximately equal the interest rate, under a steady-state situation. The rate of failure will be a little lower than the interest rate because the citizens, as a whole, keep borrowing more and more money. When the lending slows down or ceases the rate of failure will jump. Then the creditor class will be able to take ownership of the real wealth of the citizens.

If you think nobody cares if you are alive, try missing a couple of payments.

Here are some clever words from some notable people from times when debt was not normal:

Aristotle (384BC - 322BC) Greek Philosopher

"The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve. Their common characteristic is obviously their sordid avarice."

Proverb From Ancient Rome

"Happy is he who owes nothing."

"Felix qui nihil debet."

Ezra Pound 1943

"Without freedom from debt, there is no total freedom."

Ezra Pound 1943

"There is no freedom without economic freedom. Freedom that does not include freedom from debt is plain bunkumb."

Thomas Edison (1847 - 1931), American inventor

"It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges, at the hands of men, who control the fictitious value of gold. Interest is the invention of Satan."

Rev. Henry Swabey (1826 - 1878)

"For there can be no question but that Modern Banking is an adaptation of the Usurer's craft." [182]

Rev. Henry Swabey (1826 - 1878)

"King and Church worked side by side for many centuries and not only kept out the Usurer but held the price level steady - an achievement that has baffled the modern specialists and experts." [182]

Daniel Lemire 2011

"If you lend money to someone who will get much poorer as a result, and you know that this will be the result, then you should bear some of the responsibility for the harm you cause.

Ultimately, the people could rise and refuse to honor abusive loans. That is what people in Iceland and Greece are doing." [184]

Silvio Gesell 1904

"Another less well known anti-usury economic reformist was Silvio Gesell (1904), yet Keynes wrote that the world could learn more from him than from Marx. Gesell, as a successful nineteenth century merchant in Germany and Argentina, condemned interest on the basis that his sales were more often related to the 'price' of money (i.e. interest) than people's needs or the quality of his products. His proposal of making money a public service subject to a use fee led to widespread experimentation in Austria, France, Germany, Spain Switzerland, and the United States under the banner of the so-called "stamp script movement", but these initiatives were all squashed when their success began to threaten the national banking monopolies (Kennedy, 1995). Margrit Kennedy (1995), a German professor at the University of Hannover, is one of the most vocal contemporary critics of interest who builds on Gesell's ideas, believing that "interest ... acts like cancer in our social structure". She takes up the cause for "interest and inflation-free money" by suggesting a modification of banking practice to incorporate a circulation fee on money, acting somewhat like a negative interest rate mechanism."

[As quoted at]

Choudhury and Malik 1992

"Interest in any amount acts in transferring wealth from the assetless section of the population"

[as quoted at History of Usury Prohibition - Alastair McIntosh]

Thomas F. Divine 1959

"The modern definition of usury is the taking of interest at a rate that is excessive, exorbitant, or illegal. This is a fairly recent definition brought into our common usage by economists of the seventeenth and eighteenth centuries." [185]

John Calvin (1509 - 1564)

"Passages in both the Prophets and the Psalms display the Holy Spirit's anger against usurers. There is a reference to a vile evil [Psalm 55:12] that has been translated by the word usura. But since the Hebrew word tok can generally mean 'defraud,' it can be translated otherwise than 'usury.'

Even where the prophet specifically mentions usury, it is hardly a wonder that he mentions it among other evil practices. The reason is that the more often usury is practiced with illicit license, the more often cruelty and other fraudulent activities arise..."

"What am I to say, except that usury almost always travels with two inseparable companions: tyrannical cruelty and the art of deception. This is why the Holy Spirit elsewhere advises all holy men, who praise and fear God, to abstain from usury, so much so that it is rare to find a good man who also practices usury." [186]

Karl Marx 1894

"The really important and characteristic domain of the usurer, however, is the function of money as a means of payment. Every payment of money, ground-rent, tribute, tax, etc., which becomes due on a certain date, carries with it the need to secure money for such a purpose. Hence from the days of ancient Rome to those of modern times, wholesale usury relies upon tax-collectors, fermiers gènèraux, receveurs gènèraux. Then, there develops with commerce and the generalization of commodity- production the separation, in time, of purchase and payment. The money has to be paid on a definite date. How this can lead to circumstances in which the money-capitalist and usurer, even nowadays, merge into one is shown by modern money crises. This same usury, however, becomes one of the principal means of further developing the necessity for money as a means of payment - by driving the producer ever more deeply into debt and destroying his usual means of payment, since the burden of interest alone makes his normal reproduction impossible. At this point, usury sprouts up out of money as a means of payment and extends this function of money as its very own domain." [187]

Rev. Henry Swabey

"Napoleon had a shrewd knowledge of the real events that were shackling Europe and was the enemy of finance. He wrote in 1812, "One might think that all the politics and all the interests of this unhappy Continent are bounded by the price of a cask of sugar." And, "The good of that Europe which seems to envelop her (England) with good will counts for nothing with the merchants of London. They would sacrifice every state in Europe, even the whole world, to further one of their speculations." There is evidence (vide MacNair Wilson's book on Napoleon) that towards the end of his life the Duke of Wellington, who came to see something of the destructive work of the international usurers, regretted having utterly destroyed Napoleon. It was his fall that gave the usurers more power. [183]

[181] Jain. 1929. 110-111

[183] Usury and the Church of England

[184] - Retrieved 2015-14-11

[185] Thomas F. Divine, S.J., Interest: An Historical and Analytical Study in Economics and Modern Ethics (Milwaukee: The Marquette University Press,1959), 96; hereafter cited as Interest.

[186] Calvin, "Letter on Usury," A Reformation Reader, P263. as quoted at retrieved 2015-04-17

[187] Capital Vol. III Part V. Division of Profit into Interest and Profit of Enterprise. Interest-Bearing Capital Chapter 36. Pre-Capitalist Relationships