A few words on usury

Cross-posted from Christian Democracy Magazine:

It’s difficult to think of an economic activity more ubiquitous under capitalism than the charging of interest on loans meant for consumption. Modern commercial banking, including those banks in which most of us (myself included) have savings accounts, depends fully on the lending of money at interest, and has done so ever since the first silver-smithies of the Renaissance city-states of northern Italy and Flanders began printing their own bank-notes. We live in an age and a society where credit card debt and payday lenders are systematic and ubiquitous. And yet the sin of usury finds a round condemnation in a broad unanimity of Church Fathers both East and West.

So says Holy Father Basil the Great:

Tell me, do you seek money and means from a poor man? If he had been able to make you richer, why would he have sought at your doors? Coming for assistance, he found hostility. When searching around for antidotes, he came upon poisons. It was your duty to relieve the destitution of the man, but you, seeing to drain the desert dry, increased his need… And just as farmers pray for rains for the increase of their crops, so you also ask for poverty and want among men in order that your money may be productive to you. Do you not know that you are making an addition to your sin greater than the increase to your wealth, which you are planning from the interest?

And so says his brother, Holy Father Gregory of Nyssa:

Do not live with feigned charity nor be a murderous physician with the pretense to heal for a profit; if you do this, a person trusting in your skill can suffer great harm. Money lending has no value and is rapacious. It is unfamiliar with such trades as agriculture and commerce… Money lending wants everything to be wild and begets whatever has been untilled… Usury’s home is a threshing-floor upon which the fortunes of the oppressed are winnowed and where it considers everything as its own. It prays for afflictions and misfortunes in order to destroy such persons. Money lending despises people contented with their possessions and treats them as enemies because they do not provide money. It watches courts of law to find distress in persons who demand payment and follows tax collectors who are a nest of vultures in battle array prepared for war. Money lending carries a purse and dangles bait as a wild beast to those in distress in order to ensnare them in their need. Daily it counts gain and cannot be satisfied. It is vexed by gold hidden in a person’s home because it remains idle and unprofitable. Usury imitates farmers who immediately plant crops; it takes and gives money without gain while transferring it from one hand to another.

Holy Father Gregory the Theologian, in full agreement with his friends the brothers Basil and Gregory, holds that the usurer

is gathering where he has not sowed and reaping where he has not strawed; farming, not the land, but the necessity of the needy.

Archbishop Saint John Chrysostom preaches against usury with his wonted vigour:

Nothing, nothing is baser than the usury of this world, nothing more cruel. Why, other persons’ calamities are such a man’s traffic; he makes himself gain of the distress of another, and demands wages for kindness, as though he were afraid to seem merciful, and under the cloak of kindness he digs the pitfall deeper, by the act of help galling a man’s poverty, and in the act of stretching out the hand thrusting him down, and when receiving him as in harbour, involving him in shipwreck, as on a rock, or shoal, or reef.

And again:

Of what favour canst thou be worthy? of what justification? who in thy sowing of the earth, gladly pourest forth all, and in lending to men at usury sparest nothing; but in feeding thy Lord through His poor art cruel and inhuman?

Note that again and again in the homilies and writings of the Eastern Fathers we can see at work an agrarian analogy with money, and one at that all the more striking, because the analogy serves to contrast the two. Ss. Basil, Gregory of Nyssa, Gregory of Nazanzius and John Chrysostom all understand perfectly well the wickedness of treating money like seed corn, and they all use the analogy of farming (which they naturally consider an honourable occupation) to highlight the contradistinction. ‘Money doesn’t grow on trees’, or so the old saw goes—but often the hawkers of such platitudes wield them as weapons against the poor and indebted, as a way of upbraiding their laziness, profligacy or other presumed moral flaws.

When used today, the platitude of course ignores that the monetary system that we live with treats money as though it grows on trees. Commercial banks literally increase the money supply by lending at interest; money created in this way exists as a bookkeeping entry, listing the loan as an asset of the bank which lent it. Moneylending, as S. Gregory of Nyssa very aptly observed, ‘has a reed for a plough, papyrus for a field and black ink for seed’. Now, calling to mind my brief earlier treatments of wealth and money in the Church Fathers, who insisted that wealth should be intrinsically tied to work, a distinction has to be made between two different kinds of loans. It is not necessarily usurious, for example, to contribute a loan to an industrial firm, to a small business, to a farm or to some other productive project which can be reasonably expected to pay back over time, and do so by making, raising or providing things which are useful to human flourishing.

What the Eastern Fathers are condemning here in their treatment of usury, are loans which maldistribute wealth by making the acquisition of money the aim of its own lending. Using loans to prey upon the basic living and consumption needs of the debtor—food, clothing, shelter, education—these things justly fall under S. Gregory of Nazanzius’s damning description of ‘farming the necessity of the needy’. The money so produced, as the Church Fathers clearly realised, does not grow on trees—it grows on the desperation and insecurity of the poor. Payday lending easily falls into this category, as does most credit card debt, particularly in the wake of deregulation. But usury is not restricted only to these kinds of small-scale individual lenders, and any examination of usury has to take into account the pressures of necessity on poor people to appear as though they consume at a standard they can’t actually afford, just to secure the necessities of living. S. Basil in his exegetical homily on Psalm 14, counsels the poor to constrain their own spending and remain free, without becoming entangled in debt, even to ‘persevere in terrible situations’, but he also makes clear that he only so advises them ‘because of [rich men’s] inhumanity’. As the popular essayist Barbara Ehrenreich writes,

If you can’t afford the first month’s rent and security deposit you need in order to rent an apartment, you may get stuck in an overpriced residential motel. If you don’t have a kitchen or even a refrigerator and microwave, you will find yourself falling back on convenience store food, which—in addition to its nutritional deficits—is also alarmingly overpriced. If you need a loan, as most poor people eventually do, you will end up paying an interest rate many times more than what a more affluent borrower would be charged. To be poor—especially with children to support and care for—is a perpetual high-wire act.

But payday lenders and credit card companies are only the most obvious end of the problem in its modern manifestation. It is the logic of commercial consumer lending itself, of collateral and credit scores, that precipitates a desperate environment into which the poor are unceremoniously cast, such that more cut-throat forms of usury can prey upon them. In fact, S. Basil bears forth this logic explicitly as one of the reasons for condemning usury in his homily:

the avaricious person, seeing a man bent down before his knees as a suppliant, practising all humility, and uttering every manner of petition, does not pity one who is suffering misfortune… rigid and harsh he stands, yielding to no entreaties, touched by no tears, persevering in his refusal. But, when he who is seeking the loan makes mention of interest and names his securities, then, pulling down his eyebrows, he smiles… fawning upon and enticing the wretched man with such words, he binds him with contracts.

Because it ought to be regarded as a medium of exchange, and not as a commodity with its own ‘intrinsic value’, money cannot rightly have such a self-reflexive teleological orientation. If money is used in a usurious way, it becomes, in S. Basil’s words (echoing Aristotle), an ‘unnatural animal’. It involves using the debtor’s labour and the debtor’s need to consume for mere survival—in other words, the debtor’s very flesh—for the sole satisfaction of the creditor’s lust for wealth, in a way which precludes the debtor from participating fully in his own pro- and co-creative work, what Fr. Sergei Bulgakov would perhaps controversially call his own sophic genius. A monetary system informed by Patristic ethics would do its best, on behalf of all those who make their livings through wage labour, to structurally discourage usury.