2nd Installment is finally here, and I know there is at least one other person on the entire internet who is interested, because Jim Curley posted on topic last week. (And yes, I would totally write an entire blog just to keep Jim Curley entertained. What sensible person wouldn’t? Plus it turns out that the SuperHusband sometimes reads here, and when he does, he laughs at all my jokes. So that’s two reasons the rest of you have to put up with Usury. Intro is here.)
Anyhow, post #2 is a sidenote about where we are not going in this series. And it’s this:
In Dante’s era (and before) a fair bit of the moneylender’s business was loaning money to warlords. This is a rough business model: The industry functions more smoothly — that is, more profitably — when the lender is the one who can shake down the delinquent borrower. Staying afloat is rather more awkward when that relationship is reversed.
[Note to creditors of the US government: We do not intend to nuke you nor expel you. We just expect you to continue to loan us money. Forever. Because no, we are not going to pay you back. Don’t people know this by now? 99% of the time, the chronically late, the chronically disorganized, and the chronically indebted stay that way. Hence my desk and our deficit.]
So back on the not-our-topic: Moneylender finance wars.
And here is what you need to know about wars: Wars do not generate wealth.
You can have a defensive war to protect your wealth, or you can an offensive war to acquire someone else’s wealth. But war does not create wealth, it spends it and destroys it. So anyone who is loaning money (at interest) to finance a war is loaning money for a non-wealth-generating activity.
Now this is very confusing because wars keep people Very Busy. The employment rate — that is, the measure of how many people are being kept busy — goes up. And this warms our hearts, because if you haven’t got anything to do, you also probably don’t have a way to feed yourself.
But all this extra work falls into one of three categories:
- Things you get paid to do right before someone kills you
- Things you produce that will be used up by the people getting killed
- Things you could have been making all along, if only the king had wanted them sooner.
I concede that last category is a kind of wealth generation. But the king could have purchased it war or no war. And given that the whole business of war is to kill & destroy until the enemy gives up, I maintain that war does not generate wealth. (It may still be necessary – see “just warfare”. But that doesn’t mean it makes us wealthier. There are many things we must do that do not make us wealthier.)
But I go into the whole giant aside because Dante (and us as well) would have observed that the money lenders were, at least some of the time, making a profit off lending money for war. And that is mighty distracting when we want to debate the morality of usury, but I don’t think it should be our topic. Either you need to go to war or you don’t. If you must, then I suppose you’ve got to pay for it somehow, and let’s not get all carried away about the moneylenders until we understand the morality of lending at interest in blander situations. If it is an unnecessary (and therefore unjust) war, you never should have waged it to begin with, so money lenders are a moot point.
The other thing I want to say about the historic situation with money lending is all that drama over the family jewels. You know, such and such (usually Jewish) moneylender held the crown jewels of xyz great king, and blah blah blah. Hello? This is not an O. Henry story. I’m very sorry if her majesty had a particular fondness for her financial instruments. If my 401K were as pretty as all that, maybe I’d have it shaped into something I could wear on my head, too.
But whereas I will gladly dive right into the topic of holding cloaks, cars, and the family farm for collateral, I draw the line at lumps of metal and rock, no matter how cool lookin’. Precious metals and minerals are money. They do have intrinsic value out in the garage, as drill bits and conductors and all that, so yeah, if we were talking about pawning your tools, I’d be willing to talk. But the bulk of their value is as money, and it is as money, not as hardware, that bankers will accept them.
Now you can imagine that a bankrupt king would be perfectly happy to sell you sob story about why he had to shake down his banker to get back the precious heirlooms. Because it was all a plot against his poor innocent majesty. So when we start to talk about the morality of banking, especially within the historical context, keep in mind to disregard all that propaganda. It’s not about family memories. If we’re going to ream the bankers, we’ll have to find a more substantial charge than “his majesty wants his money back”.
And that’s where we’ll start to head in part III — back into the question of whether lending at interest is ever right, or ever wrong.
This series, btw, is coming out awfully slowly because I have been sleeping late. (You thought it was because I was deep in thought. No, I was not.) If I wake up early, it gives me this lovely uninterrupted writing time when I can actually think. But after a certain hour, that window is gone gone gone. The only reason I got this post out is because I sent SuperHusband off to an event with the big kids, and put two littles in bed. So if I’m going to get more substantial posts written, either I’ve got to stop sleeping so much, or else people need to start sending us more invitations. I’m good with either.