Daily Archives: July 7, 2015

On Interest And Usury: Part 1

It never ceases to amaze me how the most outlandish, proto-Castroite theories are put in the world without any real fundament in Christian doctrine.

Let us take interest, and usury.

Christianity developed during (and thanks to) the Roman Empire, a highly sophisticated capitalistic system with a highly sophisticated financial system. You will not find in those years a Christian condemnation of interest per se. Browse your Catholic encyclopaedia and you will very soon realise that at no point Christianity made it a point of doctrine to condemn the payment of interest per se. Those people who do are, if you don't know, called Muslims.

Then the Roman Eagle fell ruinously to the ground, and a general decay of pretty much everything – not excluding religious feelings, if you know your history books – followed. The economy at large – I mean by that, the economic process – decayed to such an extent that even the knowledge of how to build a stone arch (much less an aqueduct) was lost. With the general decay a lot of other things went, including the sophisticated financial system.

This primitive economy did not need interest, because it did not need debt. He who had, had and he who had not, had not. Your birth decided, in most cases, your profession. The assets of your family were your prospective assets. That was that. Commerce was far less developed than even one thousand or two thousand years before, and was strictly equity-based. It was a rather primitive, strictly land-based economy.

In this context, the lending as seen by the quisque de populo (and by the theologian alike) was a different concept than we see today. It wasn't a fully legitimate commercial enterprising, the blood and oxygen of the entire economic system, as it is today. It was the getting money from somebody else for, basically, buying bread.

Who were the lenders of such money? Often, the Jews. Why them? Because a Jew could lend money to a Christian to, say, finance prostitute and wine for a dissolute man, and make a big gain when the pig inherits. Also, because a Jew might find it not necessary to think that he who has no money for bread is rather in need of charity (a donation, or an interest-free loan) than a commercial transaction. That the poverty of the borrower would then often lead to extortionate interest on top – the proper usury – is very obvious.

After the year 1,000 very, very slowly, the progressive expansion and reawakening of the economy (everything was very slow, then; only the brutal global warming of the XIV Century gave the economy the first brutal kick in one thousand years, through the softening of the arable land in vast parts of Europe as new agricultural devices were implemented) obviously, unavoidably leads to the expansion of the lending system which is the very life of it.

Let me repeat this concept in the most brutal terms: the lending system is the very oxygen of economic expansion. If you don't know this, or don't know why, educate yourself: it's not the purpose of a Catholic blog to explain the basics of life to people old enough to vote.

But it was a very slow process, and most people lived to this day without even realising how economic growth and banking activity go, like love and marriage, together like the horse and carriage. A theologian like St Thomas could still condemn usury, but he meant something very different from that debt- driven economic activity for which in his lifetime there was very little need. He meant by it the exacting of payment for something that should be within the realm of charity, as in the example above.

Interestingly enough, eight centuries of perfectly orthodox Catholics did not get St Thomas wrong. Castro did. Francis, very probably, does.

By the fourteenth Century, two hundred years before Calvin, Italian bankers dominated the European scene. Entire industries (like the wool industry in Florence) were so intertwined with the financial activity (because of the big investments necessary) that those who were powerful in the one (say: the Florentines) became very powerful in the other (say: the… Florentines). And then there was the burgeoning shipping industry, and the exploding commerce. All things necessitating huge investments, risk division, cool entrepreneurship on both the lending and the borrowing side. The result was – way before Luther, or Calvin, who appeared on the scene in the first and second half of the XVI Century – an economic miracle that stunned the world. The result was the ascent of cities like Venice, Milan, Florence; an ascent carried by bankers working in tandem with merchants and entrepreneurs.

Italians – the most Catholic of them all – became synonyms of bankers. The “Lombards”, they were called in England, because banking families from Lombardy had been the “first movers” in the promising market of the Kingdom: again, through entrepreneurship, innovation, vision. The Italian gold coins were accepted all over the civilised world. By the fifteenth century (generations before Calvin was even conceived) the economies of the Italian Principati, driven by huge families of strictly non-Jewish bankers, had made of Italy the wonder of Europe.

These are the brutal facts. We aren't Muslims, and if you think that we should convert to some sharia economy – particularly when it's convenient – you should consider going over to the Mohammedans, and be done with it.

The Church has never condemned interest qua interest. But why is that? This, my friends, is for the second part.



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