Tradition and Usury: the Perennial Conflict
“The most hated sort [of moneymaking], and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term Usury which means the birth of money from money, is applied to the breeding of money, because the offspring resembles the parent. Wherefore of all modes of making money this is the most unnatural.”1 Aristotle (384-322 B.C.)
Usury through the Ages
Aristotle’s definition of Usury is perhaps the most cogent ever made. Usury, as originally defined, is any money made from a loan. Originally it did not mean excessive interest on a loan, but any interest. Subtle changes in definition helped to corrupt and subvert the traditional ethos on usury and finally make usury victorious. The Christian and particularly Catholic opposition to usury was founded on the dictum in Luke about giving without expecting anything in return, and on the Old Testament precepts against charging interest. The Orthodox Church was no less unequivocal. St. Basil wrote of the usurer:
“If he had been able to make you richer, why would he have sought your doors? Coming for assistance he found hostility... It was your duty to relieve the destitution of the man, but you, seeing to drain the desert dry, increased his need. Just as is some physician, visiting sick, instead of restoring health to them would take away even their little remnant of bodily strength, so you also would make the misfortunes of the wretched an opportunity of revenue... Do you know that you are making an addition to your sin greater that the increase to your wealth, which you are planning from the interest?”
“…The interest, which you take, is full of extreme inhumanity. You make a profit from misfortune, you collect money from tears, you strangle the naked, you beat the famished; nowhere is there mercy, no thought of relationship with the sufferer...2
The Orthodox Church, however, like the Catholic, did become equivocal over the centuries and this allowed for the subversion of the traditional doctrines. Questions arose as to the nature of usury as sin, and other equivocations that provided leeway.3
Opposition to usury has been a perennial feature of traditional cultures across time and space, with an intuition that there is something unnatural, parasitic and outright sinful about it. When a civilisation accepts usury as normal business practice, as does Western Civilisation, it is a symptom of an advanced cycle of decay, as both Brooks Adams and Oswald Spengler explained.
Traditional wisdom has provided warnings and prohibitions since time immemorial. The Vedic scripts of ancient India (2,000-1,400 BC) call the “usurer” kusidin, a lender charging interest. A Brâhmana (priestly) and a Kshatriya (warrior) were prohibited from practicing usury. Vasishtha, The Sacred Laws of the Aryas, states: “God weighed in the scales the crime of killing a learned Brâhmana against the crime of charging interest; the slayer of the Brâhmana remained at the top, the charger of interest sank downwards.”4 However, as in the Western and Classical civilizations, the definition of usury was compromised over time. By the second century A.D. the Laws of Manu defined usury as beyond a “legal” interest rate, after which the interest cannot be recovered. The fact that there was now a legal rate of interest at all, rather than an outright prohibition, indicates compromise of the type that arose in Western Christendom and Classical Greece and Rome. Additionally, like the exemption of the Jews from laws on usury under Mediaeval Christendom, the Hindu merchant caste were permitted trade in usury. “To invest money on interest, to be a jeweller, to tend cattle, tillage and trade, - these are declared as occupations for the Vaisya caste.”5
Siddharta Gautama Buddha returned to an unequivocal stance: “One discerns wrong livelihood as wrong livelihood, and right livelihood as right livelihood. And what is wrong livelihood? Scheming, persuading, hinting, belittling, and charging interest. This is wrong livelihood.”6
Plutarch (46–127 A.D.), in his essay “Against Running In Debt, Or Taking Up Money Upon Usury,” described usurers as “wretched,” “vulture-like,” and “barbarous.” Cato the Elder (234–149 B.C.) compared usury to murder. Cicero (106–43 B.C.) stated “these profits are despicable which incur the hatred of men, such as those of… lenders of money on usury.”
Contemporary financial analysts Sidney Homer, who worked for Salomon Bros., and Professor Richard Sylla, in their historical study of interest rates, state that the first known law on the issue was that of Hammurabi, 1800 B.C., during first dynasty Babylonia, who set the maximum rate of interest at 33⅓% per annum “for loans of grain, repayable in kind, and at 20% per annum for loans of silver by weight.” Sumerian documents, circa 3000 B.C., “show the systematic use of credit based on loans of grain by volume and loans of metal by weight. Often these loans carried interest.” “As early as 5000 B.C. in the Middle East, dates, olives, figs, nuts, or seeds of grain were probably lent to serfs, poor farmers, or dependants, and an increased portion of the harvest was expected to be returned in kind.” “Earliest historic rates were reported in the range of 20–50% per annum for loans of grain and metal.”7 Hence usury is as old as greed, and so are efforts to resist it by those who seek to maintain a connection with Divinity.
In 600 B.C. in Greece Solon established laws on interest when excessive debt caused economic crisis. Likewise, in Rome the “Twelve Tables” of 450 B.C., establishing the foundations of Roman law, after pervasive debt was causing servitude and crisis, established a maximum interest rate of 8⅓% per annum. When Brutus tried to charge the City of Salmais 48% for a loan Cicero reminded him that the legal maximum was 12%. The interest rate was often 4%. Some Greek “loan sharks” charged 25% per annum, and even 25% per day.8
The Old Testament Jews were prohibited from usury among themselves: “Thou shalt not lend upon usury to thy brother; usury of money; usury of victuals; usury of anything that is lent upon usury.”9 Critically for history, the Jews were given a dual moral code allowing them, among much else, to charge usury to non-Jews, and this has resulted in millennia of tragedy for Jew and Gentile alike: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury, that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.”10
Those prohibitions, as well as the general ethical and moral character of the New Testament, and the Classical heritage including the Aristotlean, inherited by the Catholic Church, established the basis for Catholic social doctrine, in which opposition to usury was a key element. In 325 A.D. the Council of Nicaea banned usury among clerics. Under Emperor Charlemagne (768–814 A.D.) the prohibition was extended to laymen. Here usury purely meant the extraction of more than what was lent. That is in accord with what Luke (6: 35) stated in saying that one should not expect back more than one gives. In 1139, the Second Lateran Council in Rome declared that usury is theft, and usurers would have to give restitution. In the 12th and 13th centuries, strategies that concealed usury were also condemned. In 1311 the Council of Vienne declared that anyone claiming usury was not a sin was a heretic and should be excommunicated (Decrees: 29).
Dante (1265–1321) placed usurers in the seventh rung of Hell, where the usurer would spend eternity with a heavy bag of money around his neck: Dante wrote: “From each neck there hung an enormous purse, each marked with its own beast and its own colours like a coat of arms. On these their streaming eyes appeared to feast.”11
But the Church generally allowed the Jews to practice usury, and people high-born and low would become indebted to Jewish usurers, until the strain became intolerable and their would be a pogrom. Moreover, when laws against usury slackened the pretext was an adaptation of Deut. 23:20, allowing Christian lenders to charge usury on loans to non-Christians such as Muslims, who for their part were likewise forbidden usury, which the Koran calls the sin of riba.12 Likewise the loophole for the Muslim lender has been that of being able to charge a “fee” for a loan, rather than interest. The Church attitude from Medieval times became inconsistent, where at some places usury remained prohibited while in other places what was instead called “interest” was permitted, and it was justified for the recovery of “losses” by the lender, such as late payment. Hence the Lombards, who like the Jews, also became identified with money-lending, would not charge “usury” but “interest” as high as 100%. Genoa became a centre of merchant banking where usury was pursued and the Church felt powerless to act.
In Medieval England personal loans could range from 52-120% a year, depending on collateral. Frederick the Fair of Austria was borrowing at 80%, while merchants in Italy could borrow at 5-10%. The Crown of Spain was paying 40% for short-term loans, while Dutch merchants could borrow at 1¼%.13
The Reformation ushered a revolt against the traditional moral order of Europe, and the Protestant attitude towards usury was more equivocal, Zwingli, Luther and Calvin stating that there are circumstances in which usury is acceptable. With the division of Church and State, economic theorists began to write in defence of usury as a “progressive” form of commerce, laying the basis for the amoral merchant outlook that now grips most of the world. Money-lending was defended as a “service,” a concept that is now taken for granted by almost everyone, as argued by the French jurist Molinaeus in his 16th century Treatise on Contracts and Usury. The Church banned Molinaeus’ book and forced him into exile, but his ideas spread. It is significant that England was the first to establish a legal rate of interest, at 10%, in 1545 under Henry VIII, given the revolt in Faith he ushered. Usury was banned seven years later. According to Homer and Sylla: “ During the Reformation many Protestant leaders defended interest and credit. As a result, the usury doctrine, which had held a firm grip on Jews and Christians for 2000 years, was weakened and finally deserted.”14
A century later the focus on economic thinking shifted to Holland where usury was defended as productive and essential by economic theorists such as Claudius Salmasius (1588–1653). Holland became the centre of banking, and the model for the Bank of England, founded as a private institution lending to the state, in 1694. 15 English utilitarian philosophers such as Adam Smith, and Jeremy Bentham who wrote A Defence of Usury, justified the social utility of usury. Other fathers of English economics, David Ricardo, Jean Baptiste Say, and John Stuart Mill, went further in saying that there should be no restraints on contracting parties in money-lending.
The Cromwellian Puritan Revolution completed the work of Henry VIII and usury was legitimised.16
The French Revolution of 1789, paved the way for further inroads by usury on the ruins of what vestiges remained of traditional social order in Europe. As Oswald Spengler pointed out in The Decline of the West, The Hour of Decision, and Prussianism and Socialism, going as far back as classical Rome, “revolutions” in the name of “the people” have generally been manipulated by plutocracy against the traditional social order that has stood against the reign of Mammon. The “colour revolutions” of today, in the name of “democracy”, funded by George Soros and other plutocrats, install plutocracy in states that show signs of resistance. The French Revolution, harbinger of both class-war socialism and free trade liberalism, was a precursor, in the name of “Liberty, Equality, Fraternity.” One of the first acts of the revolutionaries was to legalise usury, which had hitherto been forbidden, until the Decree of 2 and 3 October, 1789.17
The Napoleonic war plunged Europe into colossal debt with its subsequent social, moral and political devastation. It set the pattern for the “modern age.” An era of revolutionary upheaval throughout Europe, and reaching to the far off colonies, ending with Napoleon’s defeat in 1815, the several decades of further turmoil, saw the Rothschilds and other money-lenders as the real masters of Europe, while Metternich of Austria tried to re-establish a social order for Europe based around Throne and Altar. Historian Adam Zamoyski writes:
“Every government in Europe taxed whatever it could to pay off war time borrowing. Britain had spent more in real terms than it would on the First World War, and its national debt was astronomical. Russia’s had multiplied by twenty times between 1801 and 1809, and would more than double again by 1822. Austria was technically bankrupt: over the next three decades an average of 30 per cent of state revenue would be siphoned off to service this debt.”18
Zamoyski states that the five Rothschild brothers, (who had been placed strategically throughout the capitals of Europe by their father, Mayer Amschel Rothscild), “and particularly James in Paris and Salomon in Vienna, had lent most of the governments of Europe, and particularly those of Austria and France, large sums of money in return for government bonds… Metternich had close links with Rothschild, who had resolved many difficulties for him in the past and who had now arranged for his mother-in-law’s 400,000-franc debt to be written off.”19
As for the Catholic Church, “The Papal states were bankrupt by 1832, and Metternich saved the pope by persuading the Viennese banking house of Rothschild to provide him with a loan.”20
In an era where the rule of Mammon has culminated and money really is literally the root of “many evils” and the pathway to perdition for entire nations, 21 Russia is being seen increasingly around the world as the Katechon resisting a system that is, in Biblical terms, Antichrist. It is surely of epochal significance that in 2015 the Orthodox Church called for an “Orthodox Financial System” in Russia based on tradition and, like Islam, the repudiation of usury.22 No other issue is more crucial and more urgent. It is hopefully a clarion call that will see Russia lead the way as the only means of liberating humanity away from the universal worship of the Golden Calf.
1 Aristotle, Politics, Book I: 10: 5).
2 Homily 12 on the Psalms, Saint Basil the Great.
3 “Excursus on usury,” http://orthodoxchurchfathers.com/fathers/npnf214/npnf2121.htm
4 Part II, Ch. 2: 40-42.
5 Parasara smrti 1.63.
6 Siddharta Gautama Buddha, Sermon on the Eightfold Path, Majjhima Nikaya Suttra, 117:5.
7 Sidney Homer and Richard Sylla, A History of Interest Rates, Wiley, 2005, inter alia.
9 Deut. 23:19.
10 Deut. 23:20.
11 Dante, Inferno, Canto XVII.
12 Al-Baqarah, 2:275.
13 Homer and Sylla, op. cit.
14 Ibid., p. 77.
15 K R Bolton, The Banking Swindle, Black House Publishing, London, 2013, p. 16.
16 Brooks Adams, The Law of Civilisation & Decay (1896), p. 233, online : http://archive.org/details/lawcivilization00adamgoog).
18 A. Zamoyski, Phantom Terror, Harper Collins, London 2014, p. 97.
19 Ibid., pp. 384-385.
20 Ibid., pp. 473.
21 I Tim. 6: 10.
22 Anastasia Bazenkova, “Orthodox Church Calls for Alternative Financial System in Russia,” The Moscow Times, August 11 2015, http://www.themoscowtimes.com/business/article/orthodox-church-calls-for...