Usury

Lending money at interest. This was a contentious matter long before green critics began to see money-lending as the cause of economic growth. For the last two thousand years or so, usury has caused trouble because it exposes the sensitive dividing line between the public and private spheres. Usury is incompatible with the relationship between close friends—in the private sphere—since it is a breach of the direct collaboration and unconditional reciprocity which is the private sphere’s main characteristic, and it is inconsistent with the informal (non-monetary) relationships of the neighbourhood. It can, however, be quite legitimately applied to the exchange relationships that apply at larger scales. Defining and defending that fuzzy borderline, however, has caused trouble.

Clear, simple rules on the matter are spelled out in the Book of Deuteronomy: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury.”U23 It is obviously important not to demand interest on loans within the private sphere, but Deuteronomy does not advise on what to do in the middle ground with a person who is neither a brother nor a stranger, but a neighbour. Such local cooperation tends to be about matters on which the neighbouring farmer who seeks your help has no choice: if his working horse has died or he needs help with the harvest or with roof repairs, he has no room to negotiate, so that you—as neighbour-turned-usurer—could force him into a very bad deal, a lifetime of distress, if minded to do so. That is a matter for the neighbours concerned; the social scientists have no word for it with good reason: it is at the join between general and balanced reciprocity, and the neighbours themselves are better placed to know the score than we are.

On the other hand, if it is a stranger, someone not part of the local economy, who is providing the loan, the farmer will expect to pay interest. Why else should the stranger bother? Between the two clear extremes, the turbulence and uncertainty have been substantial. Psalm 15 compares usury with accepting bribes to convict the innocent. Folk tales in the Middle Ages told of the damnation awaiting usurers; one usurer was struck dead by a piece of falling masonry as he went into the church to get married. Usurers were not admitted to Christian burial, they were not allowed to rent houses, their wills were invalid; they were to be treated as heretics. Cities imported Jews to conduct a business that was forbidden to Christians.U24 Usury in Shakespeare reveals a brother as an enemy; and a thread of opposition to the idea of lending money at interest persists, for instance, in the radical environmental movement today.U25

And yet, it seemed that everyone was at it. Calvinism—which sanctified economic enterprise—forbade usury, but quoted the going rate as “10 per cent or more”.U26 The medieval cathedral chapters did it; priests did it; the building of Notre Dame was partly financed by it.U27 Kings borrowed at it; it was hard, even impossible, to get by without it. The imprecations against usury come with small print about when it is all right, after all. Jesus himself recommended it in the parable of the man who buried his talent instead of putting it out to usury.U28

It was all about the borderline between public and private. If usury invades the private sphere, it brings a loss of innocence; it says “You are not my brother. You are not part of my local communion, but belong in another, external, sphere for which I have no name.” And if the private sphere invades the public, there is trouble of a different kind. The private family-ethic, with a father at its head, is fine at the household—and perhaps community—level but not fine at all on the level of the city state or the nation. On that scale it collapses into petulance and tyranny, into non-accountable invasive paternalism such that, as Niccolò Machiavelli put it, “The way we live is so far removed from the way we ought to live, that anyone who tries to do as he ought to do takes the road to ruin.”U29 In this overextended private world, there is one simple rule: be successful. If the logic of that calls for perfidy, cruelty, murder, then Machiavelli advised not to waste time being sentimental: you are unlikely to get “beneficent” results if you do.U30 There is a yearning, tragic confusion in it, expressed by Machiavelli himself in a tyrant’s lament:

I hope—and hoping feeds my pain.
I weep—and weeping feeds my failing heart.
I laugh—but the laughter does not pass within.
I burn—but the burning makes no mark outside.U31

Failure to have complementary public and private spheres ready when they are needed is a recipe for trouble. You can recognise them easily: the public sphere does usury; the private sphere doesn’t.

 

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David Fleming
Dr David Fleming (2 January 1940 – 29 November 2010) was an economist, historian and writer, based in London. He was among the first to reveal the possibility of peak oil's approach and invented the influential TEQs scheme, designed to address this and climate change. He was also a significant figure in the development of the UK Green Party, the Transition Towns movement and the New Economics Foundation, as well as a Chairman of the Soil Association. His wide-ranging independent analysis culminated in two critically acclaimed books, Lean Logic and Surviving the Future. A film about his perspective and legacy - The Sequel: What Will Follow Our Troubled Civilisation? - was released in 2019, directed by BAFTA-winning director Peter Armstrong. For more information, including on Lean Logic, click the little globe below!

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