Authors: Lewis Hyde
Edmund Wilson once offered a felicitous phrase to describe the sense of faith in the Old Testament. It seems that no tense of the Hebrew verb conforms precisely to our active present. Instead there are two time senses, both of them eternal: things are either completed (the past perfect) or they are part of prophecies unfolding, a tense that Wilson calls the “‘prophetic perfect,’ that phase of the Hebrew verb which indicates that something is as good as accomplished.” A people who live in a perpetual prophetic perfect feel neither risk nor the vicissitudes of time as we feel them. There is no emphasis on present and active risk among neighbors.
But the stranger, as I said at the outset, was a risk for the Hebrew. He was not of the same God. To charge him usury was a way of negotiating risk at the border of prophecy. In fact, risk is only an issue at the boundary of faith. Usury, written documents, notes signed and notarized, collateral, the law, and the courts are all ways of stabilizing peoples who have no common God, who do not trust each other, who are all strangers and who live with an attenuated sense of time
and risk. Gift increases inside the circle; capital bears interest at the boundary. These are all one and the same: faithlessness, usury, and the alienation of both property and persons.
Here is a comment of Luther’s that cuts both ways on this. In the Middle Ages as now, a “surety” was a person who made himself liable for another’s debts, and friends would “stand surety” for each other. Luther condemns this as a usurpation of God’s role: only the Lord assures things. In the sense of “faith” that I am using, Luther is right: surety of any kind, including contracts and collateral, shows a lack of confidence that what is given will return. But here are Luther’s words:
He has bidden us, in the Lord’s Prayer, to pray for nothing more than our daily bread today, so that we may live and act in fear and know that at no hour are we sure of either life or property, but may await and receive everything from His hands. This is what true faith does.
Yes. And yet the word that leaps out of this passage is not “faith” but “fear.” The Hebrew may have felt risk at the edge of the tribe, but when the radius of the circle of gift is pulled back from the brotherhood into the heart of each man, then each of us feels the risk. When all property is privatized, faith is privatized and all men feel fear at the boundary of the self. Thomas Müntzer, quoted above, was right to insist on the connection: “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?”
Müntzer is addressing a faithlessness in the Reformation, and rightly so. But it would be wrong for us to leave that observation unqualified, nor is there any point in putting the weight of these changes on Luther’s shoulders alone. In a
sense he worked as a diligent and responsive reporter of the spiritual state of Europe in the sixteenth century. His new dictum does not bring the alien into each heart; it recognized that he is already there. It was a world of rising commerce and the privatization of property, a world where secular and spiritual were already divided and where the commons were no longer common. When Luther gave his first mass as a monk, his father, who had wanted him to become a lawyer because there was money in it, stood behind him in the church. The young priest was unable to feel the presence of the deity and almost fled the altar. He suffered profound depressions throughout his life. He was a man who sought to articulate a faith that would address his own experience.
Another way of describing what happened during this period, therefore, is to say that Luther brought the war home: he located the enemies of faith near at hand rather than seeing them in the alien Muslim or Jew. He reminded us of the dark side of the Lord, his wrath. It seems as if the attempt to universalize the feeling of charity had only allowed mercenaries to grow up in the back room. In this odd way there is a connection between a universal brotherhood and universal alienation. Many people, when they try to love all mankind, feel a rising contempt for their neighbors. Toward the end of his book on usury, Benjamin Nelson has this pessimistic remark: “It is a tragedy of moral history that the expansion of the area of the moral community has ordinarily been gained through the sacrifice of the intensity of the moral bond.” Luther tried to speak to this—to the looseness of that bond and the scarcity of grace that he felt all around him. He reported the situation, and, moreover, he tried to imagine the shape that faith must now take to survive. It was still his belief that brothers do not take usury from one another, but he found few brothers left for whom this was a concern.
III • Relative Strangers
The final portion of our story narrows the circle of gift even further, for the dualities of Luther, who opposed usury in conscience though not in effect, were soon to be superseded by a universalization of usury (in both conscience and effect) worked out by churchmen such as John Calvin and philosophers such as Jeremy Bentham.
In 1545 a friend of John Calvin’s asked him for his views on usury and Calvin replied in a letter. After briefly wishing “that all usury and even the name, were banished from the earth,” Calvin gets down to brass tacks, saying that “since this is impossible, it is necessary to concede to the common good.” This “common good” requires that interest not be taken from the poor, but beyond that Calvin can see no sense in restraining usury. In fact, “if all usury is condemned, tighter fetters are imposed on the conscience than the Lord himself would wish.”
The first part of Calvin’s letter applies common sense to the scriptural prohibitions on usury and lays them all aside. When Christ says that one should lend hoping for nothing in return, for example, he is obviously referring to loans to the poor; “he does not mean at the same time to forbid loans being made to the rich with interest.”
Calvin’s analysis of the law of Moses is central to the letter. The law “was political,” he says, and since the politics have changed, so have the rules:
It is said that today … usury should be forbidden on the same grounds as among the Jews, since there is a bond of brotherhood among us. To this I reply, that in the civil state there is some difference; for the situation in which the Lord had placed the Jews … made it easy for them to
engage in business among themselves without usury. Our relationship is not at all the same. Therefore I do not consider that usury is wholly forbidden among us, except in so far as it is opposed to equity or charity.
Calvin concludes “that usury must be judged, not by any particular passage of Scripture, but simply by the rules of equity.”
The idea of equity is crucial to Calvin’s approach, as one additional passage will show. In his commentaries on the laws of Moses, Calvin again maintains that the political situation has changed since ancient times; therefore
usury is not now unlawful, except in so far as it contravenes equity and brotherly union. Let each one, then, place himself before God’s judgment seat, and not do to his neighbor what he would not have done to himself, from whence a sure and infallible decision may be come to … In what cases, and how far it may be lawful to receive usury upon loans, the law of equity will better prescribe than any lengthened discussions.
Moral law is atomized in this passage. Note the focus: “Let
each
one … place
himself…
,” and so on. This style of moral calculus brings new popularity to the old saws “Do unto others as you would do unto yourself” and “God helps those who help themselves,” always sung to a tune whose accents fall on “self.” With the moral community of old reduced to the heart of the landlord, both conscience and guilt are feelings that only individuals have. Ethical dilemmas are resolved either by comparing self to self or by having each self sit alone and imagine itself “before God’s judgment seat.”
If we assume the private ownership of property and then add to it this mode of judging moral questions, we will indeed
find little reason to restrain usury. Little reason
among equals
, that is. Equity will still demand that the rich treat the poor differently, but when two businessmen meet, each will agree (even before the Lord) that capital should bear interest. And though Calvin himself does not pursue this line, equity itself may just as easily demand that the rich not deal with the poor at all, for though the Golden Rule may begin with a simple postulate, it can end with as many conclusions as there are selves (e.g., “If I were poor, I wouldn’t want a handout”).
We are now in the modern age. There are three ways to treat the double law of Moses, and with Calvin we come to the last. It can be kept as a double law (the Old Testament brother/ stranger, Luther’s church/state); it can be universalized on the side of charity (the Middle Ages); or, finally, it can be universalized on the side of usury. After the sixteenth century a brother is someone who will loan you money at the prime rate. Calvin concludes that usury is allowed so long as it is practiced among friends. Indeed a man would be parsimonious not to loan his capital, and interest is the new sign of brotherhood. This spiritual argument will emerge later in the economics of the “unseen hand” that molds the common good if each man will just determine and seek his own self-interest.
*
But let us pause here for a moment and consider the pro-usury arguments, like those of Calvin, that sprang up after the Reformation. For a funny thing happens as you read through them—after the sixteenth century one begins to feel that the spirit of charity itself demands that capital be let out at interest.
Let us look first at the problem of how a society keeps its commerce lively, how it keeps the wealth in motion. As Calvin points out, men no longer live in tribes. Those who argue for usury insist that in a nontribal economy wealth will not increase unless capital circulates and it will not circulate unless it bears interest. Calvin dismisses Aristotle: “Certainly if money is shut up in a strong-box, it will be barren—a child can see that. But whoever asks a loan of me does not intend to keep this money idle and gain nothing. The profit is not in the money itself, but in the return that comes from its use.”
A spokesman for the repeal of usury laws makes a similar point in the British Parliament in 1571: “Better may it be borne to permit a little [usury], than utterly to take away and prohibit traffick, which hardly may be maintained generally without this.” Now the wealth of the group will not move, get used, nurture, and enliven unless it is allowed to bear interest. Usury among the Hebrews would hamper the circulation of wealth, but now the opposite seems to be true: a prohibition on usury would leave wealth static and barren.
And who suffers? Those who argue in favor of usury maintain that its restraint would hurt the poor as much as the rich. Locke argued that to lower interest rates by law would not only destroy trade but ruin “widows and orphans.” In the past the widows and those who had once labored but could no longer do so were supported by their kin. How, they ask, does this differ in substance from living in old age on the fruits of invested capital? Surely charity demands that such persons not be cut off to a greater misery or forced to throw themselves on the mercy of the state.
The pro-usury argument goes even further. In 1867 Richard Henry Dana, Jr., the man who wrote
Two Years Before the Mast
, gave a speech in the Massachusetts House arguing against all laws restraining usury. He maintained that such laws do not help the poor. First of all, when interest rates are fixed by law, the poor cannot attract capital because they are forbidden to offer the higher interest that their weaker security would warrant.
Take the case of the poor, honest debtor. Sickness or misfortune has left him in debt, and a hard creditor … is pressing him to an execution. If he could borrow a thousand dollars … he could pay the debt and have a little with which to begin again. But with his poor security, and the high state of the market, he cannot get the money at six percent. You prohibit him from giving seven, even he must sell the land under his feet, the house over the head of his wife and children …, and sell it all at a ruinous loss, as is always the case in forced sales, —a loss of at least twenty-five percent! The debtor might have saved this by a loan … at the market value of his security. What shall we say of such legislation? … Is it not a shame upon our intelligence, and public spirit, and humanity?
And who, he asks, are the debtors of the modern world? “It is mostly enterprise that borrows, and capital borrowing more capital.” Who are the creditors? Ever since “a benign Providence put it into the heart and head of some person early in this century” to establish savings banks, it is the poor themselves who lend money, “the day-laborers, the seamstresses and household servants, the news-boys in the streets, have become capitalists and lend to the rich and great.” If savings banks are inhibited from lending at the highest rate the market will bear, then it is these “poorer classes” who suffer.
Having laid aside the question of the poor, Dana sketches further reasons for lifting all restraint on usury. “The market of the world,” he writes, “moves with the irresistible power of ocean tides …” Moralists cannot fix the value of capital, and to pretend they can only cheapens moral discourse. Legislated interest rates violate the “immutable laws of trade.” When the market rate falls below the legal rate, usury laws have no effect at all, and when it rises above that rate they dry up trade and drive the poor to loan sharks or make criminals out of honest creditors.
Finally, in the modern world, it seems that interest charged for the use of money no longer sets up a boundary between people. Even in tribal life, usury was a way of having some intercourse with strangers. Now the entrepreneur and the man with ready cash seek each other out. Interest is the sign of a lively community. “A live country calls for capital and can pay for it,” Dana declares, “a dead country cannot.”
So in this odd way almost all that was once said against usury may now be said in its favor. The gifts of nature and the wealth of society are now kept in motion and grow through usury; interest on capital feeds the widows and orphans, and allows the poor to start anew and share in the wealth. Prohibitions on usury deaden trade and force rich and poor alike to
compromise themselves ethically. And finally, interest on capital bears the same hallmarks as a commerce of gifts—it brings people together and ensures the liveliness of the group.