Wednesday, 26 November 2008

Debt Crisis By John-Paul Flintoff

Usury: 1. the lending of money at interest, esp at an exorbitant or illegal rate of interest. 2. an exorbitant or illegal rate or amount of interest

I've had an overwhelming response to recent posts (on the Times blog) arguing that our debt-based economic system is fundamentally unsustainable.
There have been many objections to this premise, but as far as I can tell others have also seconded my argument (or rather, since it was their work which led me to that conclusion, I seconded theirs). At the same time, a lucid and convincing (to me) article on similar lines, "The money pit", has appeared in The Ecologist magazine. (It's
by James Bruges, author of the really, genuinely wonderful Big Earth Book.)

But the thing that I have found most fascinating about the debate is the way it is whisked away from any suggestion that this might be an ethical matter. It's much easier, I guess, to debate practicalities.

At the heart of the subject is lending at interest - known for centuries as usury and still understood that way by, among others, adherents to Islam. But in globalised societies where people exchange ideas online, nobody seems able to take usury seriously. Even glimpsing the word here, on the oh-so-modern Internet, evidently strikes many people as laughable. But what were the arguments against usury that prevailed for so many centuries? Were they based on mere superstition? Have key facts come to light since then, overturning them? In both cases, the answer is no.

The arguments are many and various. They've been around for a very long time. And they’re just as strong today as they ever were. Among the Ancient Greeks, Plato said that, ‘The best procedure of the state is to legalise the refusal to the usurer of principal and interest.’ Aristotle said that usury was ‘currency born from currency’ and therefore ‘entirely contrary to nature’. (Cows produce calves, he pointed out, but coins don't produce anything.) Plutarch pithily warned: ‘You have money? Do not borrow on usury for you do not need it. You have none? Do not borrow on usury for you will not pay it off.’

The Romans felt much the same. Convicted thieves, in Rome, were fined twice the extent of their theft, while usurers were fined four times the amount.

We work for years to pay off debts. This is why moneylenders were often described as bloodsuckers - draining life from borrowers - and why Cato wrote that usury was synonymous with killing.

Many people these days might flinch before any reference to scripture, but inasmuch as it conveys the wisdom of ages, it’s worth at least hearing what the Bible has to say. In the Old Testament books of Exodus and Leviticus, for instance, lending at interest to the poor, and between Jews, is forbidden; in Deuteronomy it is forbidden without either distinction. In the Psalms, it is twice asserted that a loan should be free. Ezekiel counted all ‘increment from loans’ among the most serious crimes.

In the New Testament, Jesus specifically stated that when we lend we should ‘hope for nothing in return’. Usury, by contrast, turns private charity into a form of trafficking.

The present-day Anglican commentator on usury John Richardson explains it like this: “If somebody has a genuine need for assistance and you make money out of it then you’re exploiting their need. And if they don’t need it but you advance the money then you are exploiting their greed."

More generally, Christ called on us to treat others as we wish them to treat us - a Golden Rule that can be found in every other major religious tradition, as follows:
‘What is hateful to you, do not do to your fellow men.’ The Talmud
‘Do nothing to others which, if done to you, would cause you pain.’ The Mahabharata
‘What you do not want others to do to you, do not do to others.’ Confucius
‘One who, while himself seeking happiness, oppresses with violence other beings who also desire happiness, will not attain happiness hereafter.’ The Dhammapada
‘That which you w ant for yourself, seek for mankind.’ The Qu’ran

Martin Luther, like the Catholic Church with which he disagreed on much else, vehemently opposed usury. Calvin too felt that, ‘usury is an ungenerous profit that is unworthy of a religious or honourable man. . . It is almost impossible for usuries to be exacted without hindering our brother.’

Calvin also argued that it might be possible to lend at interest to the rich, because they can afford to take a hit. But as Andrewes pointed out, the same argument could be put forward to justify burglary. And anyway, as Plutarch had long ago observed, the rich have no need to borrow at interest.

You might think that the lack of money lent at interest held back the trading and building aspirations of our medieval forebears. Not-at-all. Money could be made available where necessary. But lenders and borrowers went into true partnerships, sharing the risk of loss and the opportunity to make a profit.

Thus, even without money that had been lent at interest, our predecessors traded and built incredible monuments, from Westminster Abbey and the colleges of Oxford and Cambridge, to many hundreds of abbeys and nunneries and parish churches that are less well known, as well as castles and great public spaces such as St Stephen's Hall in Westminster and various guild halls, and innumerable homes of rich merchants and aristocrats. These may not feature on tourists' itineraries - indeed, many are no longer standing, though that's not the fault of the original builders.

So why was the doctrine of usury abandoned? How did a crime as bad as murder become not merely acceptable but central to our way of life? On what basis did governments and bankers take a look at the Golden Rule and decide to unsubscribe? And - for the sake of the planet - can usury ever be made taboo again?

Published in The Greenacre Times (November 2008)