Usury: the crime that was and now is not
I admit I am poorly versed in economics, but my intuition tells me David Hawkes is right on the money (if you will excuse the pun) when he says that...
Legalized usury commits the human race to the unceasing pursuit of economic growth. Usury imposes an unstoppable expansion of the process of wealth creation. Usury is inherently insatiable.
And, at a deeper level, I know perfectly well what Pope Innocent IV (1200-1254) meant when he wrote that...
Usury is generally prohibited because if it were allowed all manner of evils would ensue...It is clear that practically every evil follows from usury.
In this post I will share some of my notes to revisionist Michael A. Hoffman’s book “Usury in Christendom: the sin that was and now is not”. https://www.amazon.com/Usury-Christendo ... 021&sr=1-1
A lot on the history of usury can be found online (even the Wickedpedia is worth a read) and the summary below is of course dreadfully incomplete. Hopefully it’s enough to draw attention to the permanent grievous social and spiritual damage that flows from usury, and to boost interest in the study of the banks’ war against us
Some Biblical perspectives
Exodus 22:25 prohibits usury of any kind, and a meager 1% interest rate is considered excessive in Nehemiah 5:1-13. In principle, a rate a hundred times lower would still be usury. However, advocates claim it only applies to the poor and/or only condemns exorbitant interest. Today dictionaries define usury as ‘excessive interest, over the legal rate’, but who gets to decide what is excessive and legal? Legal is anything man has legitimized. Lawful is what God allows and sanctions. According to the Old Testament, any amount of interest is unlawful. Period.
Deuteronomy 23:20 does in fact mention the poor, but does not limit the prohibition of usury to any specific group. Those who insist it only applies to the poor refuse to apply a similar reasoning to the mention of the poor in Deuteronomy 15:1-11 and optimistically announce that the canceling of debts is for the poor and the rich alike.
Interestingly, Deuteronomy 23:20 permits exacting usury from ‘foreigners’. Since the Old Testament also prohibits oppressing ‘strangers’, it has been argued that usury cannot be oppressive. However, ‘strangers’ (ger
) were law-abiding immigrants integrated into Hebrew society, whereas the word ‘foreigners’ (nokri
) referred to ‘wicked pagans’ against whom the Hebrews were expected to wage war. Indeed, usury is a weapon of mass destruction, and the Hebrews were perfectly aware of that. Charging interest on loans to fellow citizens or friendly neighbors turns the whole of society into a ‘nation of foreigners’ (nokri
), destroying the social fabric and contradicting the bidding of charity.
God did not intend that His people would be indebted for 10 or 20 years, even if the loans were interest-free. Under the Biblical concept of the Jubilee (‘acceptable year’), no indebtedness would last longer than the sabbatical 7th year. In the year after the last of seven such sabbatical years (7 x 7 +1 = 50), a Jubilee was to be declared and all debts canceled. The key Jubilee passage from Leviticus 25:10 was engraved on the Liberty Bell by the founders of the US. These men believed the Jubilee to be relevant and binding, not an atavism from the Stone Age.
The parable of the talents is by some interpreted as an approval of usury. The slothful servant calls his master a hard man and insinuates he is a thief (because he wants to reap what he did not sow). If Christ were a hard man and a usurer, it would make sense to have deposited the talent at interest. The key is in the answer: “wicked servant, out of thine own mouth will I judge thee.” I think there are other and more important levels of interpretation, but that´s for another thread.
The New Testament tells us to do unto others as you would have them do unto you. Any man in need would prefer to borrow money without interest, if given the option. Therefore, nobody is morally justified in charging interest.
Why usury is unnatural
Ezekiel 18:13 [if someone] hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.
Ezekiel 22:12-13 [...] thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord God. Behold, therefore I have smitten mine hand at thy dishonest gain which thou hast made, and at thy blood which hath been in
the midst of thee.
Leviticus 25:35-37 And if thy brother be waxen poor, and fallen in decay with thee; then thou shalt relieve him: yea, though he be a stranger, or a sojourner; that he may live with thee. Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase.
Psalm 15 Lord, who shall abide in thy tabernacle? [...] He that putteth not out his money to usury, nor taketh reward against the innocent.
Proverbs 28:8 He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor.
Jeremiah 15:10 Woe is me, my mother, that thou hast borne me a man of strife and a man of contention to the whole earth! I have neither lent on usury, nor men have lent to me on usury; yet every one of them doth curse me.
Most Pre-Christian thinkers were strongly against usury. We have it from Aristotle that...
Usury makes a profit from currency itself, instead of making it from the process which currency was meant to serve. [...] Interest bred by money is like the principal which breeds it, and may be called ‘currency the son of currency’. Of all modes of acquisition, usury is the most unnatural.
St. Thomas of Aquinas very aptly pointed out that abstracted exchange value cannot have a vendible use value in addition to the exchange value it abstracts. Usury is selling a use that does not and cannot exist, a metaphysical impossibility. Therefore, usury should be prohibited even in productive loans where the borrower is not needy.
Profit can only come from nature’s goods. Usury sets up an artificial invulnerability to the contingencies of God’s provision (i.e., nature’s goods). In modern times, this invulnerability is further secured by transforming wealth that perishes into debt that lasts indefinitely in order to derive a permanent future income from it.
Usury defies the second law of thermodynamics because, though naturally barren, it multiplies indefinitely on itself and does not rot or come to a natural end. It constitutes an attempt to create something out of nothing (loans are said to ‘bear’ interest in the sense of giving birth to something that wasn’t there), usurping a power only God possesses. A fungible is never worth more than itself; thus, by contracting for more than the principal, the creditor subverts intrinsic value.
In a commodatum, the thing lent (a horse, a tool) must be returned, and, if necessary, rent may be lawfully charged. In a loan, however, the borrower returns the equivalent
of the thing borrowed, because he has consumed or destroyed the thing received (money, food, raw material). Thus, in a loan, ownership and liability passes to the borrower. No rent or interest can be charged for what belongs to another.
In his Summa Confessorum,
Thomas of Chobham (1160-1235 AD), an indefatigable campaigner against usury, explains that...
The battle against usury in the Middle Ages
...if I have lent you money, immediately the money is yours; therefore, if I receive a fee for this, I profit from what is yours, not mine. The usurer sells the debtor nothing that is his, but only time, which is God’s. Since he sells a thing belonging to another, he ought not to derive any profit from it.
The Council of Nicaea (325 AD) condemned usury, mentioning clerics, but also cited Psalm 15 which excludes all usurers (not just clerics) from the Tabernacle (Canon 17). In fact, every important assembly of the Church, from the Council of Elvira (306 AD) to the Council of Vienne (1311 AD) explicitly condemned usury.
Thus, the 3rd Lateran Council (1179 AD) declared that notorious usurers should not be admitted to Communion or receive a Christian burial (if unrepentant) (Canon 25). This was confirmed by the 4th Lateran Council (Lyon II). The Council of Paris (1212 AD) declared that the property of a deceased usurer had to be confiscated, returned to the victims and/or distributed to the poor. Usurers could not bequeath anything in a will because “the fruits of rapine may not be the object of a gift”.
The Council of Lyon declared that the will of a usurer is null and void. Even if the moribund usurer ordered restitution, he was to be denied a Christian burial until full satisfaction had been made by his heirs. In such cases, the drafting of the last will had to be supervised by a Church official to prevent cheating. Some canons prohibited priests (not bishops) from absolving usurers even when these promised to make restitution. Usurers were to be held as infamous and ineligible for the reception of dignities and honors, and their testimony was not accepted in ecclesiastical courts.
Some usurers accepted remaining many years under the sentence of excommunication, intending to make restitution in old age. To discourage this strategy, the Council of Mainz (1233 AD) declared that if a usurer remained one month under excommunication, his wife and children would be denied the sacraments (except baptism and the last unction).
Charlemagne fought vehemently against usury and imposed heavy fines for it. In 789, he wrote Admonitio Generalis
, basing his argument on the Council of Nicaea, a letter by Pope Leo I (444 AD), the Canones Apostollorum
, and Scripture. The Council of Aix-la-Chapelle subsequently promulgated Admonitio Generalis
as Church doctrine. In England, usury was prohibited by Alfred the Great, William the Conqueror, Henry II, Henry III, Edward I, Edward III, Henry VII and Edward VI. Under William the Conqueror, usurers were whipped, exposed in the pillory and banished permanently.
Penalties for usury grew more and more severe as practitioners became more numerous and more creative in dodging the canons. Not only usurers were punished, but anyone associated with them, including...
- heirs and relatives
- those who hesitated to denounce them
- those who helped draft and execute usurious contracts, such as lawyers, notaries and judges
- those who made or enforced laws contrary to canons against usury
- those who rented houses for the purpose of money lending
- those who allowed usurers to live on their land
- those who affirmed usury is not sinful, or induced others to believe it
- clerics who failed to enforce canons against usury
- clerics who granted unrepentant usurers a Christian burial or accepted their offerings
- clerics who administered sacraments to usurers
- borrowers who did not denounce usurious lenders
- lawyers who defended usurers in court (unless they swore to retire if usury was proven)
Penalties were inflicted on the family and employees of usurers to effect conversion. The latter had to leave their jobs on pains of excommunication. Wives should refuse gifts from usurious husbands, taking only the bare minimum while attempting to convert them. If the husband was incorrigible, the wife should separate from him (quoad mensam et convivium, not quoad thorum
Punishment for clerics was excommunication (lower ranks) or loss of office (patriarchs, archbishops and bishops). Collegia and universities were placed under interdict. If the usurers were not expelled within one month of these penalties, the whole territory fell under an interdict.
Those accused of usury were compelled to show their books. Those who didn’t keep books had to prove it (swearing was not enough). Because debtors (some of whom were princes) were reluctant to appear as accusers, the Council of Paris commanded all the faithful to report usurers under threat of ecclasistical censure. In the absence of accusers, sufficient proof against the usurer could be gathered ex officio
, including books/accounts revealing the nature of their trade, documented sales on credit, and lending contracts disguised as sales contracts. Apparently, in the Middle Ages usurers were not condemned lightly and on flimsy evidence, and much effort was put into converting rather than punishing them.
I was curious about what famous legal historian Harold J. Berman had to say about the unanimous ban on usury prior to the Renaissance and the severe punishments inflicted on unrepentant usurers, so I consulted his seminal work “Law and Revolution” (657 pages in small print) which looks at all Western legal systems at least since the 9th century. The word “usury” is referenced only six times in the index (pp. 248, 261, 336, 338, 345, 530). The two most relevant passages are reproduced below:
Contrary to what is sometimes supposed, the church strongly favored the charging of interest on loans―indeed, the canonists first applied the word “interest” to distinguish lawful charges for the use of money from unlawful charges (“usury”). (p. 530-1)
The definition of usury was never entirely clear and it kept changing [...] In the 9th, 10th and early 11th centuries (before the great revival of commerce), when borrowing was almost always for consumption rather than for production or investment, the church had proclaimed many blanket prohibitions against the sin of usury. In the late 11th and early 12th centuries, however, the economic situation began to change drastically. Henceforth money was needed also for financing fairly large-scale economic enterprises of the church itself. At the same time, as John Noonan has pointed out, “many churches and monasteries were heavily endowed and under a constant pressure to find suitable investments for their funds. The monasteries were, indeed, the chief lenders to the nobles departing on the Crusades. The purchase of annuities by churches and pious institutions was on a very large scale [...] the papacy itself often had large idle sums on deposit in banks. (p. 248)
In my opinion, that’s a very poor legal analysis of radix omnia malorum
, a crime considered equivalent to theft and murder for fifteen centuries and punished with excommunication. The staunch efforts of countless Church councils between 306 AD and 1311 AD, and of important temporal rulers (Justinian, Charlemagne, St. Louis, Alfred the Great), to eradicate the crime of usury is by Berman reduced to “blanket prohibitions” (move on, nothing to see here, folks!) and to the lazy statement that “the church strongly
favored usury”! Nor does Berman breathe a word on Courson’s and Chobham’s massive campaigns against usury in the 13th century. Note the difference between “the
church” and “churches” (Berman only uses the lower case). The former would coincide with the Magisterium, the second with specific individuals and factions within the clergy. Also, without absolute and relative figures, expressions like “chief lenders to the nobles”, “purchase of annuities on a very large scale” and “large idle sums” could be fair assessments or mere rhetorical devices, depending on where the writer’s sympathies lie.
Prior to the Renaissance, economics was a branch of theology and ethics!
Beginning in 1345, however, the Florentine government imposed compulsory loans on its citizens at 5% to finance the war against the Pope and other city-states, thereby forcing them to engage in mortal sin. The scam was called Monte Commune
and lasted for centuries under different forms. Lorenzo Ridolfi (1362-1443), a crafty canon lawyer and member of an affluent family, became the principal apologist of the racket.
In 1378, Florentine workers rebelled against these compulsory interest-bearing loans (prestanze
) and actually held the seat of government for six weeks. After four years of tension and ineffective coalitions, the usurious regime was restored. By 1427, 86% of the Monte
’s credits were in the hands of the 10% richest families.
Hoffman describes the Monte
at length in his book. It’s an interesting case study of how traditional medieval practices were gradually replaced by financial rackets very much like those we see today, but time and space constraints forbid dwelling further on the topic.
The Biblical and Patristic ban on usury was abolished by changing it from a contractual matter (objective) to a crime of intent (subjective), and then institutionalizing the loophole.
Thus, many attempted to justify usury by invoking a noble purpose, such as assisting the poor or ransoming captives (there had actually been ‘charity banks’ in the 14th century which provided interest-free loans for the poor, but these were eventually hijacked). There are numerous examples of such ‘noble excuses’, from the 14th to the 19th century.
Another loophole was to insist on a cynical distinction between ‘manifest’ and ‘occult’ usury. When the Church referred to ‘manifest usurers’, it simply meant those who had been proven guilty by an examination of their books and the testimony of two or more victims. The Church never made a distinction between ‘visible’ usurers (e.g., pawn shops) and ‘invisible’ usurers (e.g., clerics and private bankers).
A popular subterfuge consisted of invoking an old Roman (not Christian) law on ‘reverse obligations’. Thus, gratitude for a loan might take the form of a gift. Bona fide
gifts were acceptable, but usurers would arrange the ‘gift’ in advance, as a disguised form of interest.
Feigning compliance with the law, loans could be declared ‘gratuitous’, but a small amount had to be paid to cover expenses and indemnity. This way the loan became a conditio sine qua non
, rather than the direct cause of the interest.
In the 16th century, the ‘triple contract’ was introduced. It was a combination of partnership, insurance and return on investment. By having each part signed by different parties, the usurious nature of the enterprise was disguised.
But perhaps the most common loophole was to change the definition of usury from “any increase on a loan” (tarbith
) to “excessive/exorbitant/biting interest” (neshec
). Loans could then be classified as lawful or sinful by answering three questions: who is lending to whom? for what purpose? at what rate?
The great change
Usury was legalized, or publicly endorsed, by the following Popes:
- Leo X (1515)
- Benedict XIV (1745)
- Pius VIII (1830)
- Benedict XV (1917)
- John Paul II (1983)
According to the Council of Vienne, by declaring that usury is not a sin, the above Popes became heretics. The other 48 Popes who have served since 1515 have failed to correct the error and restore the dogma on usury, and so, in theory, could be accused of heresy by omission. Even Pius X, who perspicaciously identified modernism as the synthesis of all heresies, did not call out the legalization of usury and the financialization of the economy as a precondition for the advent of modernism.
In 1515, Pope Leo X (Giovanni di Lorenzo de Medici) declared that the interest-bearing Monte di Pietá
banks were meritorious (because established for a good cause), not sinful, and that anyone, religious or secular, who preached against them would incur the penalty of excommunication.
In 1745, Benedict XIV issued Vix Pervenit
. In a piece of lip service, he condemned usury according to a new version of it given by himself which excluded ‘moderate interest on money’.
We do not deny that, at times, together with the loan contract, certain other titles not intrinsic to the contract may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due to the contract.
In 1830, Pius VIII ordered priests to absolve and “no longer disturb” lenders charging interest on loans provided it did not exceed the local legal rate.
In 1917, Pope Benedict XV wrote in Canon 1543 that only exorbitant interest was unlawful and that Christians could charge above the standard (legal) rate if they had a “just and proportionate title”, but he never defined ‘exorbitant’ and ‘just’, rendering the injunction meaningless.
If a fungible thing is given to another so that it becomes his, and later it must be restored in the same sort, no profit can be made by reason of the contract; but in the loan of a fungible thing, it is not in itself illicit to reap a legal profit unless it can be shown to be immoderate of itself, and even greater profit can be made if there is a just and proportionate title so supporting.
In 1983, in the Code of Canon Law promulgated by John Paul II, church administrators are actually commanded to invest for profit funds not needed to pay expenses.
Stocks, bonds, certificates of deposit or money involved in prudent loans may belong to a juridic person as part of its stable patrimony, if they belong to special funds or endowments [...] goods are to be invested cautiously and profitably.
At the dawn of Protestantism, it was the Catholic Church and the Pope, not the Reformers, who were associated with usury and mammonism. Hovewer, according to Hoffman, persistent propaganda efforts have assigned the theological justification of usury and the beatification of riches to the early Lutherans, Calvinists and Puritans.
Indeed, through his famous opus The Protestant Ethic and the Spirit of Capitalism
(first translated into English in 1930), Max Weber “trained” Western academics to associate wealth worshipping with Calvinism and Puritanism, essentially by omitting the existence of two radically different periods of Protestant teaching on usury: a ‘virtuous’ period (1520-1700) and a ‘decadent’ period (1700 onwards).
Overall, the early followers of Luther and Calvin were more hostile to usury than the Catholics were. There was in fact a certain utopian or “lay monastic” quality to many early communities that would positively impress today’s critics of corrupt government and society. This was certainly the case of New England under the Puritans from 1620 to 1700. Hoffman dedicates a considerable part of his book to shine a fresh light on this important period in history and destroy the stereotype of the humorless, scrooge-like, bigoted, pleasure-hating Puritan fundamentalist. By doing so, he renders a great service to Revisionism, but this is not the place to review it.
Calvin was divided on the subject of usury. In a letter from around 1545, possibly to Claude de Sachin, he wrote:
It would be desirable if usurers were chased from every country. [...] Usury almost always travels with two inseparable companions: tyrannical cruelty and the art of deception. [...] Our situation is different [from that of the Hebrews]; for that reason I’m unwilling to condemn it, so long as it is practiced with equity and charity. [...] We ought not to judge usury according to a few passages of Scripture, but in accordance with the principle of equity.
One wonders exactly how Calvin envisaged a matrimony between charity and usury’s inseparable
companions ‘cruelty’ and ‘deception’, or if he was himself sincerely deceived. But let’s not forget Calvin was a trained lawyer. By preferring the Greek notion of “equity” to Scripture, he was leaning on a distinction which looks suspiciously like a Talmudic loophole (prozbul
Calvin derived his proto-capitalist views from the Catholic scholar Charles du Moulin (1500-1556) (who, by the way, believed that not paying interest on productive capital is equivalent to stealing) and his popularizer, François Hottman. For those who wish to take a closer look at the connections between Catholic nominalism and Calvinist economics and the whitewashing of usury in Germany, it might be worthwhile to read up on the theologians Eck, Biel and Summenhart, the nominalist school of Tübingen, and the Fugger banking dynasty.
According to theologian and economist André Biéler, Calvin was not a driving force for capitalism; in fact, capitalism could develop in Protestant nations only thanks to the relaxation of Reformed doctrine and morals. In any case, Calvin’s views were hardly compatible with the modern entrepreneurial mentality. He wrote:
Each must be content with his vocation. Let him follow it, let him not desire to seek a different one.
Usury is not only evil and dishonest gain, but also unworthy of an honest Christian [...] It would be desirable that the names ‘usury’, ‘profit’ and ‘interest’ were completely banished from the memory of men.
The Jews understood usury is a ‘weapon of war’ and were only happy to wield it against the gentiles. This obviously painted Jewish usury in the Middle Ages as particularly malevolent. However, Christian usurers were by many considered more immoral than Jewish usurers, because they would pauperize friends and foes alike (although loopholes for Jews were eventually created).
By the early 13th century, usury had become a major component in Jewish economic life, and the terms “usurer” and “Jew” were by many used interchangeably. Bernard of Clairvaux used the word judaizare
to denote any form of money lending. The Council of Paris (1212 AD) even called financial institutions ‘synagogues for the wicked’. However, the claim that the condemnation of Jewish usury was an expression of “racism” is not sustained by any documentary evidence. Such a perception presupposes Christian usurers were left unmolested. Actually, the reverse was true: In many cases, usury was permitted to Judaic persons because they were unbaptized and therefore outside the Church’s jurisdiction. They were also protected by certain rulers who for political reasons sought usurious financing from outside the Christian community.
Hoffman believes that a hysterical fear of Jewish money oppression was whipped up to draw attention away from gentile usury and gain acceptance for a milder but institutionalized form of usury (Monte de Pietá
[Bankers] stampeded Christendom from the frying pan of rabinic usury into the fire of gentile usury, and people were supposed to be elated that they were burned by their fellow Christians rather than “those awful Jews".
Centuries before the Rothschilds, the Medicis and Fuggers were paying unscrupulous theologians to whitewash usury and building plunderous banking empires, but the House of Fugger has been allowed to remain a mere footnote in the annals of financial chicanery. Over time, as they grew exceedingly large, these empires merged with their Jewish counterparts...
...to form the modern, hydra-headed system of finance that oppresses the entire world.
Many of us are deeply concerned about the utter destruction caused by the greed, injustice, deceit and brazen mockery which oil the machinery of the modern world. I think that, while self-worship may be the archetypal source of psychopathy and megalomania, usury is certainly the oxygen that keeps the Nutwork breathing.