Usury

Three days ago, I completed a project that has taken me the best part of a year. In the middle of last summer, I received a call from a student in Switzerland on a website I frequented, appealing for someone to help translate a book from the Latin in aid of a Ph.D thesis he was working on.

The subject was Usury, and the book was a commentary by one Father Daniel Concina of the College of Preachers, dated 1746, expounding on a recent Encyclical of Pope Benedict XIV dealing with the subject. Where Benedict was blessedly brief and to the point (and the Vatican provided a translation of his words), Father Concina was anything but. Nevertheless, the subject being extremely relevant in our present day world of banking, borrowing and debt, I felt that not many people besides myself would have the background in theology, economics and Latin to be able to handle this, so I volunteered and have laboured with the project on to its conclusion.

Usury, as defined not only by the Pope but by Plato, Aristotle, Aquinas and a whole host of Catholic writers, is the demand for payment of any sum in excess of the amount originally advanced in a loan for consumption—that is, a loan where the original article loaned, whether foodstuff or money, will not be returned, but instead, something of equivalent value will be paid later on to the lender. If I rent a car, and pay for the use until I return the identical car, usury is not involved. I pay for the value I have received, and the renter has during that time gone without. However, if I lend money, and ask for more and different units of money when the debt is repaid, that is Usury, a form of theft sinful and criminal, even by Roman law.

Is this simply hair splitting? At the time of the Reformation, Calvin definitely thought so, and ruled that moderate charges for the lending of money, particularly for purposes of trade, were legitimate. Calvinism, with its tolerance of usury, became prevalent in the Low Countries of Belgium and Holland, in East Anglia (including Boston, Lincolnshire, from where the Pilgrim Fathers set sail), in the Presbyterian Church of Scotland, home of Adam Smith, founder of modern Capitalist economics, and has become in fact the basis of the whole modern day monopoly of money creation through banking, the foundation of present day Capitalism, and the gloomy Calvinist theology of full employment, hell fire and an angry God, waiting to pounce on the least of the sinner’s mistakes.

So why should such a system be condemned? Concina’s argument is that money is of its nature sterile. Whereas farms are productive, and renting vehicles provides value, the person who rents money is in fact renting a ticket to value which will be provided, not by him, but by some other member of the public at large who provides the product for which the money will be exchanged. The Banker creates this money by providing credit in the form of a loan of imaginary dollars: the physical value is provided by the public at large, whose own dollars lose value by the inflation of the money supply when this credit comes into being. Banking is in fact a subtle manner of robbing the public, evident in the continual loss in value of the dollar and so of our savings and investments over many years—something that the authorities nowadays seem to take for granted.

As a retiree. living on the aforesaid savings and investments, that point certainly resonates with me! And in a world where indecent bonuses are paid to bankers, bailed out at public expense as being “too big to fail”, while half the world’s population survives on less than two dollars per day, surely the time has come for some re-thinking. Possibly even some public indignation.

– Gemini, 2010*
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