Authors: Lewis Hyde
Those reformers and movements (such as the Anabaptists) that did not recognize the new sense of property did not survive. Thomas Müntzer, another radical priest, actively supported the peasants in Saxony and stood in clear opposition to Luther and his advice to statesmen:
Luther says that the poor people have enough in their faith. Doesn’t he see that usury and taxes impede the reception of the faith? He claims that the Word of God is sufficient.
Doesn’t he realize that men whose every moment is consumed in the making of a living have no time to learn to read the Word of God? The princes bleed the people with usury and count as their own the fish in the stream, the bird in the air, the grass of the field, and Dr. Liar says, “Amen!” What courage has he, Dr. Pussyfoot, the new pope of Wittenberg, Dr. Easychair, the basking sycophant?
What a clear voice! The authorities caught up with this man, tortured him, and cut off his head.
By the end of the Reformation the power to judge the morality of property rights rested in the hands of secular rulers. There is a story about a group of ministers in Regensburg who, in 1587, questioned the validity of the 5 percent contract. They were dismissed from their posts and exiled from the town by the Protestant magistrates. Luther generally opposes usury on moral grounds, but at crucial moments he supports civil power, and as civil power in turn supported usury, the effect of his separation of church and state was to narrow the circle of gift.
The dissociation of civil and moral law brought with it the popularity of the distinction between “interest” and “usury” which we still have today. The two terms became widespread in the sixteenth century, though in fact they had been in use for some time. In Latin the verb
interesse
means “to make a difference, to concern, to matter, to be of importance.” We still use it in this sense, as when we say a thing “interests” us or when we have an “interest” in a business. In medieval Latin the verbal noun
interesse
came to mean a compensatory payment for a loss: if someone loses something of mine, something I have an “interest” in, then he pays me my
interesse
to make good the loss (and he pays me nothing if I have no interest). The word then came to refer to what could be lost when capital was loaned, and a debtor who defaulted on a loan was
obliged to pay the
interesse
, a fixed amount described in his contract. This payment supposedly differed from
usura
, a direct charge for the use of money, but the difference was not that great: creditors came to say that if they lost profits because they couldn’t reinvest their money, this was also
interesse
, and rather than describe it as a fixed amount in the contract they came to charge a percentage reckoned periodically.
Even in the Middle Ages, then,
interesse
was, in practice, one of the shades of usury. By way of illustration we may take a dispute in the Church shortly before the Reformation that was resolved by distinguishing between usury and
interesse.
At issue had been Christian pawnshops, known in Italy then as now as
monti di pietà
, mounts of mercy. Here a Christian burdened with debt could come and borrow a little cash to begin another season. Benjamin Nelson describes their founding:
The Brotherhood of Man was the banner under which antisemitic friars … cloaked their demagogic appeals to expel the Jewish pawnbrokers, who had swarmed from Rome and Germany into the Italian towns in response to municipal invitations to set up shops, with licenses to take from 20 to 50 per cent on petty loans … [They] regurgitated the oft-discredited charges of ritual murder, incited mobs to attacks on Jewish life and property, and harangued the people and their magistrates to destroy the Jews, and establish Christian pawnshops, the
monti di pietà.
By 1509, eighty-seven such banks had been set up in Italy with papal approval …
The priests who defended the
monti
insisted that the money taken above the principal on a loan was not usury at all: it was a contribution to defray the cost of operating the pawnshops, including the salaries of the officials.
This, of course, is precisely why usury had been prohibited
in the first place: the spirit of the gift demands that no one make a living off another man’s need. A group of people comes to be called a brotherhood not only when the circulation of gifts assures that no one has lost touch with the sources of wealth, but also when no individuals in the group can make a private living by standing in the stream where surplus wealth flows toward need. If there are always enough needy people around to feed a group of pawnbrokers, then something is seriously wrong with the brotherhood.
Nonetheless, the
monti
were set up and Pope Leo X officially approved them in 1515. In a decree at the Fifth Lateran Council he ruled that they could charge interest. The money taken was not to be called
usura
, but compensation for
damna et interesse
(damages and losses). It was a fee to cover the risk involved in making a loan, the loss of what the money might have earned if it had not been loaned, and the salaries of the pawnbrokers. Even before the Reformation, “interest” was the term accepted to express the right of stranger-money to earn a moderate return.
Luther and other reformers, particularly Philipp Melanchthon, borrowed this page from their enemies. Around 1555 Melanchthon distinguished between two kinds of loan, one
officiosa
and the other
damnosa.
When a man loans his neighbor an amount he can easily spare for a short time, the loan is
officiosa
and should be free. A
damnosa
loan, on the other hand, is any forced loan, any loan with no fixed time for repayment, or “sums freely invested with merchants in the form of a partnership.” As the creditor risks a loss in all such contracts, Melanchton wrote, “the rule of equality demands that he receive a compensation, which is called
interesse
, amounting to no more than five percent.” Luther himself made similar discriminations, condemning usuries of 60 percent, for example, but allowing an 8 percent return on annuities. By the end of the Reformation a new double language had been firmly
established for the new double standard. In the eyes of the Lord, usury is still a sin and rightly condemned. But in the everyday world, interest is both necessary and just. Interest is civil usury; now we have capitalism.
There is a way in which these distinctions—between interest and usury, between moral and civil law—revive the dichotomy the Middle Ages had tried to lay aside. Moses, Saint Ambrose, and Luther all recognize two laws. However, though it is related to its predecessors, the distinction that Luther makes is radically different.
In the first place, it is a different thing that is divided in two. In the Old Testament, mankind as a whole is seen as either Brother or Other, and an Israelite conducts himself differently depending on whom he is with. Now each man is divided. The church and the state may be separate but each man partakes of both. When each man has a civil and a moral part, the brother and the stranger live side by side in his heart. Now when I meet someone on the street he is either alien or kin, depending on his business. As each man may participate in a universal brotherhood, so he may partake in an unlimited foreignness. He may be an alien anytime he chooses and without leaving home. He may justify the calculations of his heart as a necessary check to the calculations of others, just as Luther justifies the sword.
Luther’s dichotomy differs from that of Moses in yet another way. When the stranger and the brother live side by side, it is not only each man’s heart that is divided, but the local population as well. Rather than a new tribalism we find the seeds of social class in Luther’s formula. Here is a passage from
Deuteronomy with Annotations
in which the stranger of old ends up as the poor man of today:
Why is it that [Moses] permits repayment of a loan to be demanded from a stranger … but not from a brother …?
The answer is that this … is according to a just principle of public order, that by some privilege citizens are honored beyond outsiders and strangers, lest everything be uniform and equal … The world has need of these forms, even if they appear to have a show of inequality, like the status of servants and maids or workmen and laborers. For not all can be kings, princes, senators, rich men, and freemen in the same manner … While before God there is no respect of persons, but all are equal, yet in the world respect of persons and inequality are necessary.
Luther is not just speaking of the ancient world here. When social policy is called into question, he does not feel it should be decided by “the common herd, which is insolent anyhow,” but prefers to place his trust in the princes. To my knowledge, he does not develop the idea directly, but his tone certainly leads one to feel that Christians, though rare, are probably more numerous among the landowners and that the new aliens may well be the lower classes.
One could almost argue that the new formulations of the Reformation are an attempt to reclaim space for the spirit of the gift. Luther tried to free the Church of its empire. Even in his ceding of power to civil rulers there can be seen a desire to reclaim the proper sphere of the spirit in a neo-Mosaic fashion. But when we listen closely to Luther’s tone, we do not hear the call for a new brotherhood. Other reformers exhort this, but not Luther. He goes out of his way to insist that the Christian spirit cannot be set loose in the world:
I have already said that Christians are rare in the world; therefore the world needs a strict, hard temporal government that will compel and constrain the wicked not to steal and rob and to return what they borrow, even though a Christian ought not to demand it [the principal], or even
hope to get it back. This is necessary in order that the world may not become a desert, peace may not perish, and trade and society may not be utterly destroyed: all which would happen if we were to rule the world according to the Gospel and not drive and compel the wicked, by laws and the use of force, to do and suffer what is right. We must, therefore, keep the roads open, preserve peace in towns, and enforce law in the land, and let the sword hew briskly and boldly against the transgressors … Let no one think that the world can be ruled without blood; the sword of the ruler must be red and bloody; for the world will and must be evil, and the sword is God’s rod and vengeance upon it.
Luther is hardly speaking up for brotherhood here, nor does he sanction civil law in order to affirm gift and grace. Moreover, his language is the one that has always been connected to the alienation of property, the language of separation and war. (Luther was the first since Saint Ambrose to feel aggression in the Old Testament permission: “The Jews do well obediently to yield themselves to God as instruments and to fulfill His wrath on the Gentiles through interest and usury.”) But more important than the bellicose tone, what Luther does here and elsewhere is to affirm a scarcity of grace and gift. We shall feel this more clearly if we pause and contrast the sense of scarcity in Luther with an earlier sense of bounty. Recall these lines from the fourteenth-century monk, Meister Eckhart:
Know then that God is bound to act, to pour himself out into thee as soon as ever he shall find thee ready … Finding thee ready he is obliged to act, to overflow into thee; just as the sun must needs burst forth when the air is bright and clear, and is unable to contain itself. Forsooth,
it were a very grave defect in God if, finding thee so empty and so bare, he wrought no excellent work in thee nor primed thee with glorious gifts.
Thou needest not seek him here or there, he is no further off than at the door of thy heart; there he stands lingering, awaiting whoever is ready to open and let him in … He longs for thee a thousandfold more urgently than thou for him: one point the opening and the entering.
Such intense feeling of an attainable grace and the overwhelming confidence in its bounty seem to disappear sometime during the fifteenth century. Certainly they are not present in Luther. What Luther feels on all sides are dis-grace and scarcity. The spirit is no longer lingering by the door of the heart but set apart like the Protestant pulpit raised above the heads of the congregation. The laws of Moses are “most beautiful and fair” but hardly practical anymore, and the Gospels are utopian and not much good for ruling the world. Power has left the common assumption of generosity and lies with the legions of trade.
In postulating the scarcity of goodwill and in dissociating the Gospels from the everyday world, Luther sets both the Lord and the possibility of gift farther and farther away, a spiritual form of the scarcity economics that always accompanies private property. Now Christians are rare, grace is unusual, and moral conscience is private and without worldly weight.
In one sense the reemergence of ancient usury bespeaks a decline in faith. Gift exchange is connected to faith because both are disinterested. Faith does not look out. No one by himself controls the cycle of gifts he participates in; each, instead, surrenders to the spirit of the gift in order for it to move. Therefore, the person who gives is a person willing to
abandon control. If this were not so, if the donor calculated his return, the gift would be pulled out of the whole and into the personal ego, where it loses its power. We say that a man gives faithfully when he participates disinterestedly in a circulation he does not control but which nonetheless supports his life.
Bad faith is the opposite. It is the confidence that there is corruption, not just that the covenants of men may be severed, but that all things may be decomposed and broken into fragments (the old sense of “corruption”). Out of bad faith comes a longing for control, for the law and the police. Bad faith suspects that the gift will not come back, that things won’t work out, that there is a scarcity so great in the world that it will devour whatever gifts appear. In bad faith the circle is broken.