Called ‘[a] monster in nature: the overthrow of mighty kingdoms, the destruction of flourishing States, the decay of wealthy cities, the plague of the world, and the misery of the people,’ the practice of usury has been thought to have profound effects upon a society throughout history.[1] Hated across place, time and culture, usury was spoken against by Plato, Aristotle, and many other classical thinkers, while interest was regulated across many ancient cultures. Forbidden as a sin by the Catholic Church, today usury has been normalised, and there is such confusion over its definition that few people know what it is. The best definition of usury is the charging of interest on a mutuum loan, which is a loan secured by nothing but a personal promise to pay. Once this definition of usury is understood, and the current pervasiveness of usury appreciated, usury’s effects on our culture can be examined. The only sin which has been successfully expunged from popular consciousness, usury is key to understanding why the modern world is the way it is. In becoming ubiquitous, usury has been a hidden force ruining our cities, worsening traffic, undermining working conditions, subsidising bad taste, encouraging inflation, putting strain on families and extinguishing our independence. Nevertheless, there are ways to avoid this trap and remain independent.
Widespread Cultural Prohibition on Usury
Many cultures believe that charging interest is potentially unjust. Consequently, they seek to regulate the amount or kind of interest that may legally be charged. Many people still have a vague cultural memory that the Catholic Church prohibits usury as a sin, and that usury was therefore prohibited across the West for centuries.[2] Islam also has an official prohibition against usury, based in part on Mohammad’s statement in his last sermon that ‘Allah has forbidden you to take usury (interest); therefore all interest obligations shall henceforth be waived… Allah has judged that there shall be no interest’.[3] The Jews were banned by the Old Testament from engaging in usury with other Jews, and with accepted strangers, but were allowed to charge foreigners usury.[4]
In ancient Mesopotamia maximum limits were placed upon the interest legally chargeable. Charging interest on interest (compound interest) was illegal.[5] In ancient China the government sometimes provided interest-free loans to farmers to protect them from usurers.[6] Compound interest was illegal, and usury laws were enacted in the first millennium BC.[7] On the subcontinent ‘ancient Indian literature reviled usurers and set maximum rates of interest.’[8] The rate of interest chargeable on a loan ‘varied according to the nature of the commodity …, the type of security, and the caste. The lowest rate of interest was taken from the highest caste and became greater with decreasing status.’[9]
In ancient Greece during Solon’s life ‘interest charges were often exorbitant and debtors were subjected to life servitude. If there was no property to be mortgaged the debtor might pledge himself, or his relatives into slavery.’[10] Solon enacted a humane law code called the seisachtheia which ‘prohibited future loans on the person, or mortgages with the person of the debtor as security.’ [11] It did not, however, interfere with the interest rate chargeable on loans secured on property, which concurs with the definition of usury to be presented in the next section.
In addition, Aristotle and Plato both spoke against usury. Aristotle wrote:
Usury is most reasonably hated, because its gain comes from money itself and not from that for the sake of which money was invented. For money was brought into existence for the purpose of exchange, but interest increases the amount of the money itself (and this is the actual origin of the Greek word: offspring resembles parent, and interest is money born of money); consequently this form of the business of getting wealth is of all forms the most contrary to nature. (Pol., 1258 b, 23).[12]
Plato wrote:
[b]ut these money-makers with down-bent heads, pretending not even to see them, but inserting the string of their money into any of the remainder who do not resist, and harvesting from them in interest as it were a manifold progeny of the parent sum, foster the drone and pauper element in the state. They do indeed multiply it… (Rep. VIII, 556 A).[13]
In classical Rome usury was also disliked.
The attitude of these laws of Ancient Rome towards interest was one of limited tolerance. Bellot is among the few authors citing the Archaic idea that all interest was illegal. Roman custom considered the mutuum, or loan for consumption, as an interest-free contract, but allowed the payment of interest to be added under certain circumstances, in which case the loan was called foenus.[14]
[T]he Roman money lenders or foeneratores advanced money to small farmers who, having lost their crops, had to borrow in order to survive (Livy, VI, 26). Slavery for debt was not uncommon and Tacitus called usury “vetus urbi foenebre malum”, or “the old curse of the city” (Ann. VI, 22).
Cato reported in De Re Rustica that moneylenders were held in the highest contempt, condemned for transgression of the law to twice as high a penalty as a thief. In preference to farming it is sometimes more profitable to use money in trade or in lending, but the former is very risky and the latter dishonourable. (I, 1). “The borrower asks for medicine and is given poison; bread and is offered a sword; liberty and is condemned to slavery.” [15] As reported by Cicero, Cato believed that usury was as bad as murder. “Quid est foenerari? Quid est caedere?” (“Would you take interest? Would you kill a man?”) (De Officiis, Book II, 25).[16]
In his essay “Against Borrowing Money,” (in Vol. 10, pp. 313-339), Plutarch admonishes debtors to “flee from the hostile and tyrannical money-lender, not demanding like the Mede land and water, but interfering with your liberty and lowering your status.”[17]
The widespread dislike of usury suggests that usury was historically understood to be a social evil with pernicious effects.
Definition of Usury
Today usury is commonly thought to be charging excessive interest on a loan. The Oxford Dictionary of English defines usury as ‘the act or practice of lending money at interest, esp. Law at an exorbitant rate.’[18] This definition requires that we have some means of determining which rate of interest is excessive. Most people would probably consider an excessive interest rate to be far higher than the rates usually charged by banks now. This would make moral concern with usury practically irrelevant today. Hardliners might define excessive interest as a far lower rate. E Michael Jones, for instance, believes charging any interest on a loan is usury, and cites the Papal Encyclical Vix Pervenit as his authority.[19] However, usury historically had a far more precise meaning which did not depend upon the definition of excessive interest.
The most detailed, well-reasoned and compelling definition of usury is that used by the Catholic Church. This definition has been obscured because it turns upon fine distinctions in the Latin vocabulary used by the Church to discuss this issue.[20] In English, the word loan has two meanings. It can be used to mean lending something which will be returned, and to mean lending something for which an equivalent amount will be returned. For example, if I loan you my car, you will return my car. If I loan you a cup of flour because you ran out while baking, you will return an equivalent cup of flour, not the same flour, to me. Latin has a specific word, ‘mutuum’, for this second type of loan, where an equivalent, not the original thing will be returned.[21] A mutuum loan was also called a loan for consumption, because the actual thing loaned would be consumed and an equivalent returned.[22] Barry Nicholas in An Introduction to Roman Law states:
Mutuum … was a loan for consumption, not simply for use, ie. a loan of things, such as money, food, and drink, which can ordinarily be used only by being consumed. It accordingly involved a transfer of ownership, and obliged the borrower to return not the thing itself but its equivalent in quantity and quality. … The obligation being simply to return, no claim for interest could arise from the mutuum itself.[23]
According to USLegal.com’s definition:
Mutuum is a Latin term which means a loan or a borrowing for the purpose of consumption by the borrower. The borrower can consume its use. However, such loans are to be replaced in kind at the termination of the bailment. A mutuum arises where one person transfers certain quantity of res fungibles to another who becomes the owner, subject to obligation to restore same amount of same quality as those received.
At common law, a “mutuum” was generally regarded as a sale for the reason that the specific property delivered is not to be returned, subject to certain exceptions under which transactions were regarded as bailments. [In re Estate OF Ellis, 24 Del. Ch. 393 (Del. Ch. 1939)].[24]
Because official Church documents are written in Latin, the distinction of the kind of loan can be lost in translation. Latin discussion of mutuum loans, or loans of returnable goods, both tend to be translated into English as ‘loans’, without the additional subtlety being specified. This is unfortunate, because the distinction between these two kinds of loan is crucial for the definition of usury.
The Papal Encyclical Vix Pervenit summarises the Church’s position on usury. E Michael Jones is entirely correct that the English version of this encyclical states:
I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.[25]
This supports E Michael Jones’s assertion that the Catholic Church defines usury as any interest charged on a loan. However, as Zippy points out, the original encyclical was published in Latin, and the original Latin uses the term ‘mutuum’, and its various derivatives.[26] A Latin version is available here for comparison with the English version above. The English version has translated ‘mutui’, the genitive singular form of mutuum, as ‘loan’ without giving any more context, as can be seen by comparing the translation below with the English above.
I. Peccati genus illud, quod usura vocatur, quodque in contractu mutui propriam suam sedem et locum habet, in eo est repositum, quod quis ex ipsomet mutuo, quod suapte natura tantundem dumtaxat reddi postulat, quantum receptum est, plus sibi reddi velit, quam est receptum; ideoque ultra sortem, lucrum aliquod, ipsius ratione mutui, sibi deberi contendat. Omne propterea hujusmodi lucrum, quod sortem superet, illicitum, et usurarium est.[27]
It is entirely understandable that E. Michael Jones, and any other reasonable English speaker who was not aware of the distinction between a mutuum loan and a loan of a returnable good, and who tried to understand the Church’s position on usury by consulting the English translation of this document, would conclude that usury is charging interest on any loan. The original Latin version of Vix Pervenit, however, makes it clear that usury is charging any interest on a mutuum loan, a loan where the borrower can consume the original good lent and return an equivalent. Consequently, I believe that the correct definition of usury is interest charged on a mutuum loan, and that this is the Catholic Church’s position, as shown by Vix Pervenit.
The Difference between Mutuum and Secured Loans
Zippy Catholic’s Usury FAQ is a useful resource for anybody interested. As the concept of a mutuum is somewhat foreign to the modern mind, Zippy has explained that a mutuum can be thought of as a loan secured only by a personal promise to pay, while a loan of a returnable good can be thought of as a fully secured loan.[28] In a mutuum, the lent object which will be consumed or spent cannot secure the loan because it will shortly cease to exist, or be out of both the borrower’s and creditor’s control. Therefore, unless some other property is put up as full security, in which case the loan would become a fully secured loan, the only thing which secures a mutuum is the borrower’s promise to pay.[29] This is a promise which the borrower cannot know they will be able to keep, as they do not actually have an equivalent piece of property, or they would not have needed a loan. In contrast, a loan of a returnable good, such as a car, can be characterised as a fully secured loan because if the borrower cannot pay, the lender can take back the property, here the car, and that will be the end of the debt, [30] aside from any outstanding charges that accrued while the borrower still had the property.
Interest can be charged on a fully secured loan because the interest can be characterised as the borrower paying the creditor to rent the property until they have paid the price agreed to purchase it.[31] For example, if I want a car but do not have the money, I can arrange to buy a car from you by making payments in instalments (paying the principal). As I want to be able to drive around while I am doing this, you can also agree to rent me that car while I am making payments towards owning it. The interest can be thought of as an additional fee to rent the car before I have bought it. The car remains your property until I have fully paid for it, at which point I cease paying to rent the car, because it is now mine. If I cannot pay, you take back your car and I cease my payments, because I am no longer going to buy the car, and I am no longer renting it. There will not be a continuously accumulating sum of money for which I am liable after you have repossessed the security, in this case the car, in a fully secured loan.
Alternatively, I may want money for something. I have a car, which I sell you in order to receive a sum of money. However, I also want to continue to use the car I just sold you, and, as you don’t actually want to own my car, but instead want a monetary income, you allow me to rent the car back from you while I work to repurchase it from you for the agreed sum. If I pay everything, I will have bought my car back from you, and because it is now mine, I will stop paying to rent it. If I cannot pay, you can take the car, but again I stop paying anything because I am no longer renting or repurchasing the car from you. Both of these scenarios are examples of fully secured loans. It is not usury to charge interest in this way because the good being lent is always identifiable, under the parties’ control, and can be returned at any point to end the loan.
Fungibility
In a fully secured loan, it is clear what the interest is being charged for. It is the cost of renting property which can be characterised as belonging to the creditor.[32] When interest is charged on a mutuum it is unclear what the interest is being charged for. The creditor will get back the money they lent in the principal, and are not leasing any other property to the borrower. The usurer might say that the interest is the cost of renting the money, but money is a fungible good. This is a good whose value derives from its being spent or consumed, such as food or money.[33] Fungible goods, which are acquired in order to be consumed, will not be returned at the end of a contract. At most, an equivalent item will be returned. St Thomas Aquinas covers this distinction when explaining the sin of usury in the Summa Theologica question 78. He explains fungibility in question 78 article 1:
[W]e must observe that there are certain things the use of which consists in their consumption: thus we consume wine when we use it for drink and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself and for this reason, to lend things of this kin is to transfer the ownership. Accordingly if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. On like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.
On the other hand, there are things the use of which does not consist in their consumption: thus to use a house is to dwell in it, not to destroy it. Wherefore in such things both may be granted: for instance, one man may hand over to another the ownership of his house while reserving to himself the use of it for a time, or vice versa, he may grant the use of the house, while retaining the ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides this, revendicate the house from the person to whom he has granted its use, as happens in renting and letting a house.
Now money, according to the Philosopher (Ethic. v, 5; Polit. i, 3), was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.[34]
Under a mutuum, which is a loan of a fungible good, interest cannot be characterised as rent, because the thing loaned is not being rented, it is being consumed. As explained above, historically a mutuum was considered to be a sale of the good to the borrower, with the price being paid by supplying an equivalent item, because the borrower would dispose of the property, which they would only be able to do legitimately if they were its owner. It is unjust for the creditor to both sell the borrower a good, and then to charge them for consuming their good. Unlike a fully secured loan, the property in a mutuum cannot be characterised as belonging to the creditor until the loan is repaid, so they cannot be charged for renting the property in the meantime. To do so would be to charge twice for the same thing, and is usury.
Effect of Default with Secured and Mutuum Loans
Under a fully secured loan the effect of default is known from the beginning of the contract; the creditor will get to keep the property which secures the loan. The debtor loses the property, and any money paid to date, and any money outstanding at the time of default, and there the consequences end. If at any point repayments of a fully secured loan become too burdensome, the debtor can choose to return the property upon which the loan is secured and end the contract in full knowledge of the consequences.
In the case of a mutuum, where the debtor has made a personal promise to pay, the consequences of default are less certain. As they have nothing to return to end the contract, the borrower has no way to terminate the contract and stop interest accumulating on their debt. Theoretically, interest charged on a mutuum will continue accumulating until all the repayments are made, a feat which becomes increasingly unlikely as the interest progressively builds. As discussed above, in Ancient Greece for example, the defaulting debtor and their family could become enslaved to the creditor.[35] In Renaissance England, the defaulting debtor on a mutuum was imprisoned in debtor’s prison at the pleasure of the creditor, a different kind of slavery.[36] Today, bankruptcy laws will protect debtors from the endless accumulation of debt, and are often fairly lenient in the West, but there remains the threat of a prison term, and the average person in a usurious loan does not know what will happen if they default.[37] Bankruptcy laws are something provided by the state to protect borrowers, and are not terms of the loan contract, so the borrower may not know about them.[38] The effects of default on secured and mutuum loans are very different, which is one of the reasons why interest charged on a secured loan is not usury, while it is always usury to charge interest on a mutuum.
Recourse and Non-Recourse Loans
Today, instead of dividing loans into mutuum and fully secured, we have similar concepts called recourse or non-recourse loans. A recourse loan is a loan where, in the event of default, the creditor can pursue the individual personally for the full amount of the outstanding debt.[39] The lender has recourse to the borrower aside from any property put up for collateral should the collateral not cover the debt. In the case of a home loan, if the bank repossesses the house, but the house does not cover the full amount of the debt owing, the bank can continue to chase the borrower.[40] This means it is a mutuum, as the debt is not ultimately secured upon the house, but by a personal promise to pay anything owing. As the lender can continue to chase the borrower after repossessing the house if it was insufficient to discharge the debt, it becomes clear that the bank was lending money, a fungible, not the house. Interest paid on a recourse loan is therefore usury.
There are also non-recourse loans. ‘Non-recourse debt is a type of loan secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount. This is one instance where the borrower does not have personal liability for the loan.’[41] This is a fully secured loan, and interest charged on this is not usury, as specific assets, not people, provide the whole of the security.
One must be careful about how one uses the term ‘secured loan’ however. Many banks will talk about a loans as ‘a secured loan’ when there is some security involved, even if it is a recourse loan, because they reserve the right to continue to hold the borrower personally liable if that security does not cover the defaulted amount.[42] I think this is misleading, or at least confusing, but the use of the term ‘secured loan’ in this way means it is important to be clear whether a loan is recourse or non-recourse.
Using this terminology usury could also be defined as interest charged on a recourse loan, but for the sake of clarity It is better to use the definition of interest charged on a mutuum. Most people will know that they do not know what a mutuum is, and need to look it up, while it is easy for commonly used business terms to be misunderstood or to change meaning.
Lending to Corporations
As corporations are not people, a debt in a corporation’s name is not usury, provided there are no personal guarantees from real people made to the creditor.[43] A loan to a company with no personal guarantees can be characterised as a loan secured on the assets of the company.[44] It is therefore a non-recourse loan. In the event of default the bank can take the assets of the corporation, but has no recourse to specific individuals. Therefore, interest can be charged on a loan to a corporation, provided there is no recourse to individuals, and it will not be usury.
A societas in ancient Rome was a trading or business group to which loans could be made, which appears to be similar to a modern corporation.[45] There is evidence that the Church recognises societas loans as non-usurious. One piece of evidence is Pope Innocent III’s ‘letter, Per Vestas to the Archbishop of Genoa in 1206, on the question of partnership or societas, which he considered permissible’.[46] A loan to a societas or corporation without personal guarantees is not a mutuum, and is not usurious.
While a loan to a corporation without any personal guarantees is not usury, it is quite common for the directors of the company to give personal guarantees to banks when applying for loans.[47] To charge interest on a loan with a personal guarantee is usury, because the loan is now secured by a personal promise to pay, and is recourse.
Other Moral Problems with Usury
There are other ways of looking at usury which illustrate its moral problems. Firstly, the debtor is promising to pay an amount that they are not certain they can meet. They are hoping that they will be able to pay off the loan through future earnings, but they cannot be certain that they will be able to, because they do not currently possess money or assets sufficient to pay the loan if their future earnings are not what they anticipated. Thus, their promise to pay could be thought of as a lie. Secondly, the usurer knows that the debtor is not sure they can perform their promise, but still requires them to make that promise as a condition of the loan, which is unethical.
Usury also has a conceptual link with slavery. Zippy comments:
[A] usurious contract is – by its full recourse nature – a purchase of the potentialities of a person. The potentialities of a person are not something which actually exist at the time of purchase. Recall that, in order to “own an economic share” in (or have economic access to) the potentialities of a thing, you must own a share in (or have some sort of property claim against) the actual thing; and it is not morally licit to buy and sell economic shares in persons as if they were property.[48]
In the past, this link between usury and slavery could be observed in the case of the poor, who, faced with a year of crop failure for example, may be forced to borrow at usury in order to survive, and from there, slavery.[49] Where people were in need of charity, usurers took advantage of their misfortune, and the populace naturally disliked this predatory behaviour.
Another way of understanding the operation of usury in society is to recognise that the usurer makes a living not from increasing the total productivity and goods available in the world, but by farming the imprudent. As money obviously cannot increase of its own accord, the usurer makes his money multiply by parasitically transferring already existing money in society from others to himself. This is not done by providing something valuable to society for which people happily pay in a mutually beneficial exchange, as normal providers of goods and services do, for example. To paraphrase one commentator, ‘usury is destructive by its very nature and can never provide an aggregate increase in the sum of human welfare’.[50] Rather, the usurer lends some money, then expects more to be returned, without providing anything extra to justify this additional fee. Other things being equal, the same amount of money exists in that society at the end of the usurious transaction, but more of it is in the hands of the usurer. In other words ‘[u]sury is a zero-sum game, in which the usurer’s profit is the borrower’s loss’.[51] It is clearly bad for society to increase the class of people who add no productive value to the economy, and who would not willingly be supported through charity. This is further compounded by the common belief that usurious loans were often used to fund conspicuous consumption,[52] and thus debauched society in the process of transferring capital into the hands of usurers, as will be discussed later.
Why Definitions Matter
It is important to have an accurate definition of usury in order to avoid condemning economic activity which is perfectly licit. One of the first religious figures in Western Europe to endorse some legal usury was Calvin.[53] This was because the definition of usury he adopted was so broad that it essentially meant any engagement in the market economy was usury:[54]
…Calvin claims that any self-interested economic behaviour is usury….According to Calvin’s logic, every participant in a market economy must stand convicted of usury, for he treats as “usury” any bargain in which one participant seeks his own advantage at the expense of the other.[55]
Given that almost no one by that point in history in Western Europe could live without participating in the market economy, this meant that no one was free of the sin of usury.[56] Therefore, Calvin concluded, some usury must be permissible to avoid driving people to despair of living a virtuous life, and, feeling condemned regardless of their actions, deciding to embrace vice fully.[57] It is to avoid a rebound from rigorism to laxity that we must be careful not to needlessly condemn economic activity which falls outside the definition of usury. Even if a rebound from rigorism does not take place, it is wrong to insult and condemn those engaged in legitimate business as usurers if they are no such thing. Economic activity which is not usurious may still be wrong on other grounds. Attempting to deal with all financial wrongs through the rubric of usury is neither accurate nor helpful.
It is interesting to note that E. Michael Jones, having understandably but erroneously concluded that usury is any interest charged on a loan, also condemns capitalism in general; an economic system in which most of his listeners will have to participate for the foreseeable future. If the definition of usury which I have outlined is correct, perhaps this will in turn affect E. Michael Jones’ conception and subsequent denunciation of capitalism.
The Sin of Usury
For any Catholics interested, it is important to note that the sin of usury lies with the lender.[58] The borrower may commit the sin of material or formal cooperation in evil by taking on the loan, depending upon the circumstances.
Cooperation in evil, as distinct from actually doing evil oneself, occurs when one moral agent concurs in the evil deed of another. Cooperation is formal if one agrees (either directly or indirectly) with the other’s evil deed: for example, a gunsmith willingly supplies a gun to a bank robber, with the intention of assisting the robber in his evil deed. Cooperation is material if one does not agree with the other’s evil deed, but only innocently provides some goods or services which the other abuses in order to perform the deed: for example, to sell petrol to a bank robber, who subsequently uses his car for the getaway. Formal cooperation is always wrong, because to cooperate formally is to adopt the evildoer’s end as one’s own. Depending on the relationship between one’s own act and that of the other agent, material cooperation may be permitted if one holds a sufficiently serious reason for cooperating.[59]
Applying this to the question of usury, we can conclude that a borrower who knows that usury is a sin and that the loan they are contemplating taking on is usurious, and who agrees to the loan because they want to participate in the sin of usury, is committing the sin of formally cooperating in evil. This is because by agreeing to a usurious loan the borrower is causing the lender to sin by making the usurious loan, and it is wrong to willingly facilitate another’s sin.
If these conditions are not in place, the borrower may be materially cooperating in evil. Most borrowers will be ignorant that usury is a sin, or that the loan they are engaging in is usury, and for this reason their cooperation will only be material, as they are not intending to participate in the sin of usury. While an ignorant borrower in a usurious loan is materially cooperating with evil they cannot be held culpable for this because sin requires full knowledge.[60]
St Thomas Aquinas believed it was permissible for a borrower to accept a usurious loan where circumstances were sufficiently bad to justify it;
Accordingly we must also answer to the question in point that it is by no means lawful to induce a man to lend under a condition of usury: yet it is lawful to borrow for usury from a man who is ready to do so and is a usurer by profession; provided the borrower have a good end in view, such as the relief of his own or another’s need. Thus too it is lawful for a man who has fallen among thieves to point out his property to them (which they sin in taking) in order to save his life, after the example of the ten men who said to Ismahel (Jeremiah 41:8): “Kill us not: for we have stores in the field.”[61]
As previously stated, most usurious loans in the West are not made to those who are really in poverty, so the circumstances in which a borrower with full knowledge of usury can agree to a new usurious loan without formally cooperating in evil will be severely limited.
Current Practice of Usury in the West
If we consider the definition of usury described above, the extent of the normalisation of usury in the West will become clear. To my understanding, most mortgages would fall into the category of usury, because they are secured only on a personal promise to pay by a borrower, and have full recourse to a person. In the UK, Europe and Australia, almost all mortgages are full recourse.[62] In some states in the US, mortgages may be non-recourse, and so would not be usurious.[63] Most personal loans and car loans are recourse loans and thus would be usurious. Some banks may describe a car loan as a secured loan if they have the right to sell the car to recoup costs, or describe a personal loan as a secured loan if it is secured against some other asset which the borrower owns. However, they also generally reserve the right to continue to pursue the borrower for any amounts owing after the sale of the asset.[64] This is therefore not a fully secured loan, but is a recourse loan, which is ultimately secured on a personal promise to pay. It is thus a mutuum. I avoid calling loans which are recourse ‘secured loans’ even if there is some asset securing part of the loan because it gives people the impression that the loan is non-recourse when it is not.
Of course, one cannot assume that anyone with a mortgage, personal or car loan is participating in a usurious contract, as their particular loan may be non-recourse. Student debt is a more complex issue which I will not deal with in this article as I do not know sufficient details of the student loan regimes across the West to easily conclude whether they would be usurious. For those interested, Zippy Catholic’s Usury FAQ considers whether other kinds of loans and financial instruments would meet the definition of usury.[65] I have confined myself to the most common and obvious examples here.
If we recognise that most mortgages, personal and car loans in the West, in addition to a large number of business loans, are usurious, we can see the extent of usury’s influence in our societies. Many people not only have no qualms about engaging in usury, which is unsurprising given that few people know what it is, but actively strive to engage in usurious loans as a borrower, believing it to be the path to wealth. The counterintuitive belief that going into debt and paying usurious interest could lead to wealth is partly due to usury’s interaction with inflation, which will be discussed below.
Usury’s Socially Destructive Effects
Where does the Money Go?
We have seen that usury does not increase total human productivity or bring new goods into the market, but instead transfers already existing goods within a society. As usury is so common in our societies, it is worth investigating the direction of the money flow. The overwhelming trend is a transfer of money from ordinary people to banks, who are the biggest and most professional usurers. Every transaction involving interest makes profit for the banks. While ordinary people may think the majority of suburban real estate in our societies is owned by normal families, and may believe this to be an improvement on feudalism or the arrangements of other historic periods, the reality is that a handful of banks are in many cases the real owners, as they have the ultimate right to repossess the property if the loan is not paid.[66]
Though interest rates are considered to be low at present, because of the size of the loans made when ordinary people take out a mortgage and the length of time it takes to pay off, banks can expect to collect $100,000, and often more, in interest on the average mortgage.[67] As most people in our societies expect to get a mortgage during their life, most people in our societies intend to give a bank such a sum, either individually or as a member of a couple. This is substantially more lucrative than charging fees to store money, the main business of banks without usury. When personal and car loans are included in this equation, we can see how much more profitable business the banks are doing through usury than they would do in a society without it. While a certain amount of non-recourse debt would exist in a society without usury, outlawing usury would drastically cut the amount of borrowing done by ordinary people. An institution which drains this much money from ordinary people, who feel privileged to be in a position to qualify for increasingly large loans, is obviously a powerful tool for slowly bankrupting a people.
Aside from creating the absurd situation in which we measure a person’s wealth by the size of their debt, usury practised society-wide leads to society-wide poverty. Pope Innocent IV ‘developed his own arguments that showed usury to be a social evil, prohibited because of the evil consequences that follow from its practice. Usury results in poverty for the debtor if taken over a long period of time, and poverty is dangerous to the soul.’[68] If we consider the personal wealth of average people without including debt as an asset, we find that most people are in the negative.
Debauchment of Taste
In the process of transferring money from ordinary people to themselves, banks fund spending on things which people would find difficult to justify if they were spending their own saved money. This produces a general degeneration of taste and culture. Writing about the culture of usury in Renaissance England, one author states that ‘[o]ne of the most frequently noted effects of usury was the growth and spread of consumer desires. The microcosmic capitalism of early modern London provided plenty of direct, visible evidence of the connections between usury and consumerism.’[69] ‘The desires and aspirations fostered by consumerism were recognized as the consequences of usury, because people had friends and acquaintances who had been personally affected by them. … In a city where style and image were means to respectability, the appearance of wealth could be a means to actual wealth, and many people attempted to borrow themselves rich.’[70]
Modern usurious car loans would be a good example of the process by which usury funds bad taste. The money banks temporarily make available is used to support a flourishing market in overpriced, frivolous and obnoxious vehicles, the existence of which habituates the public to the idea that in order to be considered successful one must own such a car. Supporting this market, instead of a market in sensible, reliable, good-value cars, contributes very little to the good of society. Widespread usury accustoms society as a whole to spending money on fashionable things for conspicuous consumption, and creates a superficial, mean culture, in which people become desperate to maintain the appearance of having ‘made it’.
With usury freely at work in our society, suddenly every suburban couple has to spend a year’s double pay plus interest to look and drive like a drug dealer in a BMW X5. This car offers no utility beyond a second hand Toyota, and costs many times as much, yet society increasingly looks down on the Camry owner. However, the real comparison between vehicles developed in the age of usury and those which were not, is not between a tired but good value Camry and an overpriced but fashionable BMW X5. A second hand Camry may be a sensible, unpretentious vehicle, but it was still developed in an era in which usury had become widespread. Cars built before World War II, before inflation and usury for ordinary people were embraced, have a claim to be better comparison vehicles. These cars are universally more stylish and interesting, and far more dignified than any modern vehicle, no matter how fashionable. In addition, because they are classics today, they do not depreciate in the way modern cars do. One also suspects that they may last longer than a modern car full of plastic and computers. Even if they do not become harder to maintain than a pre-Second-World-War car, we can predict that the BMW X5 will not be maintained because as soon as it is no longer fashionable there is nothing intrinsically interesting about it which will motivate anyone to expend money and effort maintaining it.
It also happens that a culture which values conspicuous consumption and transient fashions with no genuine aesthetic value will feed an economy of planned obsolescence. In a usury-driven culture people look forward to getting a new car, regardless of the state of their current car, because the fashions have changed and theirs is no longer cool. No one in such a culture is concerned if their car only lasts 10 years, as they have no intention of keeping it that long. In a culture which holds intrinsic worth in high esteem, and where goods are designed to have true aesthetic value, there would be no need to buy a new product every five years, since the original bought remains useable and attractive. Such a culture would be concerned if their goods only lasted a short time. This would create the demand for what Ivan Illich calls a ‘durable-goods economy’[71] which ‘is precisely the contrary of an economy based on planned obsolescence. A durable-goods economy means a constraint on the bill of goods. Goods would have to be such that they provided the maximum opportunity to ‘do’ something with them: items made for self-assembly, self-help, re-use and repair.’ Such an economy would also promote self-reliance and independence, as well as reducing waste.[72]
An interesting correlation to note is that during my childhood usury had not spread so far that car loans were common. Fake grass was also almost entirely absent from suburbia. Now car loans are common and fake grass is present and rapidly spreading. Before, anyone with a fake lawn would have been justly looked down upon by their neighbours for their crassness and desire to imitate poorly what they could not be bothered cultivating. Then, those who couldn’t grow a lawn had the sense to admit it, and live with pavers or bare ground, recognising that plastic grass is neither convincing nor pleasant. Now however, the suburbs are littered with fake grass, and people who previously would have had nothing to do with such a product start conversations at social gatherings about its convenience. Other examples of this trend towards vulgarity can be observed throughout our culture.
I submit that things paid for with saved money are in better taste than those paid for with borrowed money. Consider the case of a man who wished to buy a jet ski. This man actually had the savings for the jet-ski. He could not bring himself to pay for the jet-ski with his savings however, so bought it with a loan. This is instructive. Once one has actually saved money, the idea of parting with it for something like a jet-ski becomes repulsive. Debt allows one to indulge in poorer taste than one could justify to oneself if one spent savings. The only reason debt is available for such things is because interest is allowed to be charged on a mutuum loan. If interest could not be charged, no one would be willing to finance jet skis, tvs, new cars, holiday homes, boats, drag cars, dirt bikes, exotic holidays, plastic surgery or any of the other means our societies have developed for enculturing permanent debt. One’s family and friends may be willing to lend one money without interest for something important, but would certainly not be willing to do so to enable one to buy a jet ski or a large screen television. Usury therefore enables much more frivolous spending than would occur without it.
Relationship with Slavery
Plutarch allegedly asked ‘Are we not ashamed to pay usury? Not contented within the limits of our own means, we do by giving pledges and entering into contracts, fabricate the yoke of our slavery.’[73] This quote neatly expresses the mechanism at work in usury whereby the borrower willingly binds himself to a contract which will force him to work and undermine his independence. As mentioned above, usury has a conceptual relationship with slavery. This is logically the case where a loan is secured on a personal promise to pay. It must therefore be secured on that person, which is to say that the person is security for the loan, which is similar to slavery. ‘The reason usury “works” is because usurers can buy “slavery shares” in individuals (as opposed to property shares in assets); and individuals of little means are tempted into it because selling a part of themselves into slavery makes them feel (and spend) as if they were wealthier than they really are.’[74] I would add that it is not just individuals of little means who find such bad exchanges tempting. Doctors, for example, are notorious for leveraging a tolerably large income by ordinary standards for luxury cars and McMansions. It is bad to allow certain people within our societies to tempt others to sell parts of themselves into slavery, even if they do so by appealing to the avarice of the borrower, and even if modern bankruptcy laws do make default tolerably comfortable.
It is true that modern bankruptcy laws make defaulting on a loan in the West tolerably comfortable, but there still exists the threat of a jail term, and this does not change the nature of a usurious contract. ‘Even with the safeguard of personal bankruptcy, a usurious contract is – by its full recourse nature – a purchase of the potentialities of a person. …Continuing the comparison to slavery (since usury and slavery are in the same moral genus), that a slave might have certain legal remedies in the case of an abusive master, or might under certain conditions have an opportunity to escape his condition, doesn’t make him any less a slave. He might be in better shape than other slaves who lack those remedies and opportunities; but he is still a slave.’[75]
In the West it is not those in poverty who are the recipients of usurious loans. The borrower may end up in a state not dissimilar to poverty through a usurious loan, but before they took on the loan they certainly had a tolerably stable income. Otherwise, the bank would have been unlikely to lend to them, since they would have been considered to be at high risk of default. It being illegal today to really enslave a person and have them work off their debt as an indentured servant or similar, there is no reason for banks to make loans to people who will not be able to service them for the foreseeable future. It should be evident, then, that the recipient of a usurious loan has exchanged the autonomy afforded by a stable income for the dependence of debt. Instead of slowly building savings upon which they can rely in times of need, the earner has elected to place themselves in a position of reliance upon their current employer, as any fall in income will quickly place them in financial strife. The effect of this is surely to render submissive that part of the population which, without usury, would enjoy some independence. This artificially benefits employers, for whom the worker must labour to pay off the loan.
Usury Creates a Compliant and Desperate Workforce
The fact that instead of savings, the average worker in a semi-well-paying job has debt, and usurious, interest laden debt, means that the workforce in general becomes more desperate. The worker with debt is afraid of losing his job. As they have little savings, their ability to service their debts is entirely dependent on having a continuous income. A short period without this income may see them loose the property they borrowed to purchase, and may bankrupt them. This very common fear of losing one’s job makes the workforce in general more compliant, less likely to complain of poor treatment or demand their rights. If the bulk of the workforce is cowed and desperate, it is harder for anyone to demand to be treated properly. Even if you are willing to complain, you will be the only one, and are easily replaced by someone more desperate.
This leads to poorer working conditions. As employers in the West are often required to pay a certain wage by legislation (an essential protection in an employer’s market), they instead make use of the workers’ desperation in other ways. Many industries now have an expectation of unpaid overtime from their employees.[76] This is usually illegal, but the employers know that their employees will do it anyway.[77] Unrealistic productivity expectations may make workers feel they need to do extra at home to keep up. Mandated break times may not be honoured. The culture of the workforce may simply be bitchy and unfriendly. Workers may be forced to act as though they were constantly stressed and rushing, not because it in fact makes them any more productive, but because the kind of employer and manager who is promoted in a culture of usury believes stress produces results, and that a calm worker must be careless and unproductive. All of this makes being a member of the workforce far more unpleasant than it need be. I recently read an advertisement for a graduate professional position which assured the reader that a job with this company would mean ‘you won’t feel sick coming to work.’ It does not bode well for our societies if companies now feel that they can advertise themselves to prospective employees by merely promising that working for them will not lead to psychological trauma.
As people in our culture see having a mortgage as getting ahead, they believe having a job which enables them to get a mortgage is a privilege. Banks prefer to lend to people with full time permanent positions.[78] Because it is slightly harder to fire a permanent employee, the banks prefer to lend to them rather than to people who earn casual wages or who subcontract, even though these people may earn more than the full time permanent employee. This means that the bulk of the population, who wish to be the recipient of usurious loans, prefer to work in permanent positions. Therefore employees happily accept the ‘privilege’ of being paid less per hour in order to have slightly better job security, no ability to refuse work, and only a fixed number of weeks’ holiday per year. These positions give them far less ability to choose the hours, or the kinds of jobs they do, or to refuse bad work, than do those of casual employees or subcontractors. While the ‘gig economy’ can easily deprive employees of job security, there are also unpleasant slave-like aspects to full time permanent work, particularly in an economy full of desperate debtors, which are worth noting. I imagine that employment in a well ordered society would be on a casual basis, with the worker retaining the right to refuse work at will, but generally long term and stable, as is already the case today in some industries, such as hospitality.
It would be an effective human resources strategy to encourage one’s workers to get into debt in order to have a more compliant work force. Whether it is specifically encouraged as part of the psychological warfare which human resources teams wage against the average employee remains to be proved, but employers certainly benefit from the culture of usury we live in.
Poor Working Conditions Compounded by the Monetisation of Time
As the money that was lent in a mutuum is returned in the principal, interest must be being charged for something other than the original money lent. In fact, the only thing that the interest is paying for is time, which is not something which can legitimately be charged for by the usurer.[79] If a large number of people in our society, and predominantly those actively engaged in making money, have monetized time, it becomes clear why we have the saying ‘time is money’. For those in usurious contracts, time is in fact money. The slower they pay their debts, the more interest they will have to pay. This goes some way to explaining why our societies are so rushed. As Guido Hulsman says, ‘we are moving at an incredible speed’ compared with our ancestors.[80]
If one is always under time pressure one’s work becomes stressful. Many businesses, run by people in debt, operate in a state of rushed chaos because more work is taken on than the business can handle. The owner feels that he hasn’t got the time to spend on little details such as organisation. He knows he must make plenty of money to pay his debts, and that any delay will increase his debts, so he agrees to all work which is offered him, regardless of the business’s capacity to perform the work well, or the quality of the work offered him. Further, if the work done by his employees is not producing an immediate financial gain, in his eyes it is not only failing to make him money, the time spent on it is actually putting him further into debt. Of course, it is quite clear to those outside the haze of time pressure induced stress that spending a little time planning things thoroughly is actually the path to a more successful business, but this, alas, is beyond the horizons of the kind of business owner that predominates in a usurious market.
Lack of Leisure
If one is saving, rather than paying off debt, and something does not work out as planned, it merely takes one a little longer to save for whatever one was saving for. If one is in debt there is far less leeway for things to take longer. The debt must be repaid on a strict schedule. Interest continues to accumulate when it takes longer to pay. When one has a usurious loan to pay, one loses money by doing nothing. Obviously, this curtails one’s ability to enjoy leisure. One can enjoy the weekend if one is a wage earner, but the ability to take more than the contractually stipulated maximum of time off work is greatly reduced, and earning at less than one’s fastest pace will see one’s interest payments increase, putting one under constant time pressure.
The kinds of activities which a stressed borrower will engage in during their limited leisure time are likely to be different from those of a freeman with savings. The pastimes of a debtor will tend to involve more passive escapism than the person with real leisure, as they come home tired after the maximum of wage earning they can handle. Watching television, drinking, watching sport and fashionable weekend activities such as going to farmers’ markets and wineries, will all take precedence over those leisure activities which require the input of consistent time and effort, such as painting, music, gardening, learning a language, or thinking deeply about topics of interest, all of which were considered leisure pursuits in other eras. Such activities, in contrast to the former list, are of a kind which further develop a person. They result in new knowledge and skills, or the production of good or beautiful things. It is bad if large numbers of people in our societies no longer have the time and energy to engage in real leisure, and instead use what free time they have in relaxing distractions. Having sufficient relaxation is important, but one’s life should not solely alternate between necessary work and passive relaxation. Usury ensures that few adults have the time necessary for real leisure.
Creating a Proletarian Society
Another effect of usury is the transformation of the majority of people from peasants who sell their produce into proletarians who sell their labour. David Hawkes argues in his book The Culture of Usury in Renaissance England, that the enclosure movement was understood at the time to be a result of usury.
The struggle was not only between the financial bourgeoisie and the landed aristocracy. The consumer desires arising within London’s gallants and cavaliers caused them to raise rents and enclose their lands, which in turn drove the peasants to abandon independent agriculture and become sellers of their own labor. Contemporaries identified usury as the motor driving this process, for the nobility borrowed to buy commodities, and were then forced to exploit their tenants in order to pay the interest.[81] In early modern England as in ancient Greece and Rome, usury was an important factor in driving the peasantry off the land and creating a landless proletariat’.[82]
A society where the majority of the population are proletarians has a different culture from a society made up mostly of peasants. The OED defines the proletariat as ‘wage earners collectively, esp. those without capital and dependent on selling their labour.’[83] Pieper says;
Being ‘proletarian,’ first of all, is not the same as being poor. One can be poor without being proletarian: the beggar in the class-structured medieval society was not a proletarian. On the other hand, one can be a proletarian, without being poor: the engineer, the ‘specialist’ in the total–work state is, certainly, proletarian. … [W]hat is it to be proletarian? If we take all the various sociological definitions and reduce them to a common denominator, it can be summed up something like this: being proletarian is being bound to the working–process.[84]
To be bound to the working process is to be bound to the whole process of usefulness, and moreover, to be bound in such a way that the whole life of the working human being is consumed. This ‘binding’ can have various causes. The cause may be lack of ownership, for the proletarian is the ‘wage–earner without property,’ who ‘has nothing but his work,’ and thus he is constantly forced to sell his working–power.[85]
I would argue that the family which binds itself to a mortgage which requires a double income to service will find themselves being consumed by that debt, continually forced back to work without enough time to develop interests and pursuits outside of work.
Only in such authentic leisure can the ‘door into freedom’ be opened out of the confinement of that ‘hidden anxiety,’ which a certain perceptive observer has seen as the distinctive character of the working world, for which ’employment and unemployment are the two poles of an existence with no escape.’[86]
One of the cultural differences between peasants and proletarians is perhaps the proletarian’s choosing money over time. Writing about modern working conditions in America in The Overworked American: The Unexpected Decline of Leisure, Juliet Schor,
… presents the astonishing news that over the past twenty years our working hours have increased by the equivalent of one month per year—a dramatic spurt that has hit everybody: men and women, professionals as well as low-paid workers. Why are we … repeatedly “choosing” money over time? And what can we do to get off the treadmill?[87]
Compare this modern tendency to choose money over free time to the choices made by peasants;
The peasant’s free time extended beyond officially sanctioned holidays. There is considerable evidence of what economists call the backward-bending supply curve of labor – the idea that when wages rise, workers supply less labor. During one period of unusually high wages (the late fourteenth century), many laborers refused to work ‘by the year or the half year or by any of the usual terms but only by the day.’ And they worked only as many days as were necessary to earn their customary income.[88]
This phenomenon is quite understandable if we suppose that a proletarian is in a far less secure position than the late fourteenth century peasant, and therefore takes every opportunity to maximise income when it is available. Borrowers in usurious contracts also know that for them, time is money, and any additional money now makes it that much easier to pay off their loan. The peasant, on the other hand, being confident in their future earning power, (both for themselves and their children, a kind of security which does not exist for the majority of people in the West now), and comfortable with their yearly income, chose to maximise their leisure time over money. That so few people today feel that they can refuse paid work when it is available suggests that the economic position of the ordinary Westerner is in some ways worse than that of the fourteenth century peasant.
In the medieval economy, peasants – whether serfs or freepersons – had secure, time-honored access to land. And land was what nearly everyone depended on for survival. Crop failures might lead to hunger or starvation, but most ordinary people retained social rights to some part of their manor’s holdings, and hence to food. …The growth of a world market [sic][89] led to the uprooting of the peasantry from the land that had sustained them for centuries. Lords enclosed open fields, in order to claim ownership to carry out commercial schemes. Peasants lost control over what had once been a ‘common treasury’ from which they had derived a measure of independence. Now their survival depended on participation in the market in labor. They had become proletarians, reduced to selling time and toil. … These changes degraded the status of many common people: ‘To lose control over one’s own (and one’s family’s) labour was to surrender one’s independence, security, liberty, one’s birthright.’[90]
It seems to me that peasants involved in independent agriculture could be thought of as subcontractors or small business owners, who therefore have an additional layer of security between themselves and poverty than the proletarian who sells his labour. The peasant can fall back on selling his labour, while the proletarian already has. As Hawke comments, somewhat theatrically, ‘Unlike a peasant, a proletarian literally sells him- or herself, exchanging determinate portions of life for money, and this goes a long way to explaining the immense differences between societies of peasants and societies of proletarians.’[91] Peasants, being more independent, were less bound to the working process. They had some property, they could exercise a certain level of discretion about what they worked on, when, and how, and they were not constantly being monitored by an employer. They also had more abundant free time to use as they wished.[92]
Today, it is a small percentage of society which owns their own business or subcontracts. As an employee, one has very little control of the situation in which one works. As a business owner or subcontractor however, one has for more control over one’s working conditions, the kinds of work one accepts and what one charges for it. Where employment conditions are good, being an employee can be a reasonable way to make a living. It should not be necessary for everyone to become a hustler in order to have a decent life. However, when the employment market is unfavourable, and employment conditions are poor, having a buffer between oneself and the average employer is desirable. Usury eats away at this buffer by ensuring the debtor will have limited savings to fall back on, and by ensuring they are always forced back into full time work quickly to service their loan.
A lack of savings also makes starting a small business difficult, and usury makes the risks associated with starting a business or subcontracting greater. While a person with some savings could quit their job to work for themselves, and then return to employment should that prove unsuccessful, with a loan to service, the risk of having a lower income for even a short time puts one in jeopardy of default. More people stuck in the employment market makes job competition that much worse, and gives employers that much more market power.
What is interesting about today’s financial desperation is that much of it is voluntary. Usurious loans are the reason that people with stable incomes end up permanently in need of money. They are willingly entered into by the debtors.
During the industrial revolution, working conditions became famously bad, and it took decades of fighting by common people to reduce working hours to the 8 hour work day, re-establish minimum standards of employment and redevelop social welfare for those who were out of work or could not support themselves.[93] I see the modern welfare systems in the West as a replacement for the rights to the commons, and the charity of the monasteries which used to exist before their dissolution in England.[94]
Schor also suggests an 8 hour work day was probably the norm for peasants in the late middle ages, and that traditional and church holidays ‘in medieval England took up probably about one-third of the year’.[95] Therefore, the campaigns for a 40 hour work week were merely re-establishing what was lost in the industrial revolution.[96] While the official full-time work week remains 40 or so hours a week, depending upon where in the West one lives, Schor finds that the reality in America is that hours of work per week have ceased to drop since the 1940s,[97] have been climbing since the late 1960s,[98] and have increased such that Americans in 1987 were working more than a month per year more than in 1969.[99] If one factors in the increase in hours worked outside the home by married women over this period, as can be seen in the graph below, it becomes obvious that the number of hours worked per member of the population would have increased even further since the Second World War.[100] This trend towards the working conditions prevalent in the eighteenth century raises a question: are we willingly going to go through another industrial revolution for the sake of a depressing outer suburban subdivision an hour away from our workplace and anywhere one would ordinarily wish to spend time?
With the development of the replacement rights of welfare and minimum employment standards, an ordinary citizen in a Western country should at least theoretically be in a reasonable position to negotiate decent working conditions. However, by convincing everyone to sign up for large usurious loans which take decades to pay off, financial powers have managed to get large segments of the population willingly signing away their rights. Of course, those rights still exist, but most usurious borrowers will not feel that they can fall back on welfare rather than accept poor working conditions, because welfare may not be enough to service their loans.
Neither will borrowers feel they can enforce minimum employment conditions against an infringing employer, for fear of losing their job, or getting a bad reputation with other employers. At any point a borrower may lose their job and need to quickly get another to continue servicing their debt, so they always need the largest possible pool of potential employers. A reputation as an employee who demands their minimum employment rights may not worry someone willing to use their welfare rights, but is a big risk for a debtor with a thirty year loan to pay. Therefore, instead of refusing bad work or complaining to the relevant authorities when employers fail to provide the legally mandated conditions, safe in the knowledge that, if necessary, they can fall back on welfare while they find a better job, everyone acts as though they had as little legal protection or social rights as the factory workers in the industrial revolution. I should also point out that it is illegal in many Western countries to fire an employee for enforcing their workplace rights, and there may be legal remedies available if they are. The fact that nobody is willing to enforce their rights makes it an employer’s market, and makes it that much more difficult for those few who are interested in enforcing their rights to do so.
Spiralling House Prices
As almost no one actually has the money to buy a house, and everyone buys with debt, the housing market now resembles a pyramid scheme. Consider that if people needed either to have the savings to buy property, or have assets sufficient to secure a loan for a house, (meaning, in all probability, that they have assets worth the price of the loan which they wish to take out) very few people would be able to afford a house on today’s market. This would logically mean that to sell a house, the seller would have to lower the price from that asked today. The reality, however, is that they do not need to lower the price because property prices are propped up by potential buyers being able to borrow increasingly large amounts at interest, and bid for what they cannot even remotely afford.
The new owner’s ability to resell the house for something like the price they paid for it, or even increase that price, depends upon new people entering the market and being willing to buy the house. That people are continually willing to pay more than the previous buyer, taken as a general trend, suggests that the price paid does not rest upon any rational appraisal of the house’s value. Speaking of the real estate boom in the United Kingdom and America, Hulsmann comments that participants in these markets ‘…have evaluated the assets without regard for the price-earnings ratio, speculating entirely on finding, at some point in the future, a buyer who is even more bullish than they are now, and who will therefore consent to pay an even higher price.’[101] Real estate is a good, and obviously has inherent value, but the continual influx of new buyers, less and less able to afford a house, keeps the scheme going and the prices spiralling ever higher. The graphs below show the increase in the cost of house prices relative to average incomes in the United Kingdom,[102] the United States[103] and Australia[104] over time:
The rent market is affected by the price of real estate as well. The graph below shows rents increasing as a proportion of median household income during the same period that housing prices have increased relative to household income.[105]
It is interesting to note that while most of the graphs used here have been compiled from government census data, the governments themselves seem reluctant to make these graphs and to include them in their publications. This is perhaps because they so strikingly illustrate one way in which the current standard of living has declined since the 1950s, when it first became normal for ordinary families to take out a mortgage to buy a house.[106]
With the average cost of a home in San Francisco hovering at $1.61 million, a typical 30-year mortgage—with a 20 percent down payment at today’s 4.55 percent interest rate—would require a monthly payment of $7,900 (more than double the $3,333 median monthly rent for a one-bedroom apartment last year).
Over the course of a year, that’s $94,800 in mortgage payments alone, clearly impossible on the aforementioned single teacher’s salary [$72,340], even if you somehow put away enough for a down payment (that would be $322,000, if you’re aiming for 20 percent).
The figures become more frustrating when you compare them with the housing situation a previous generation faced in the late ’50s. The path an average Bay Area teacher might have taken to buy a home in the middle of the 20th century was, per data points and rough approximations, much smoother.
According to a rough calculation using federal data, the average teacher’s salary in 1959 in the Pacific region was more than $5,200 annually (just shy of the national average of $5,306). At that time, the average home in California cost $12,788. At the then-standard 5.7 percent interest rate, the mortgage would cost $59 a month, with a $2,557 down payment. If your monthly pay was $433 before taxes, $59 a month wasn’t just doable, it was also within the widely accepted definition of sustainable, defined as paying a third of your monthly income for housing. Adjusted for today’s dollars, that’s a $109,419 home paid for with a salary of $44,493.
And that’s on just a single salary.[107]
San Francisco may be a particularly overpriced market today, but the same trend is experienced to lesser or greater extents across the West. It remained easier for ordinary families to service a mortgage into the 1970s.
The minimum wage in the United States has gone up 353% since 1970, and average incomes have gone up approximately 500%. In that same span, however, the cost of basic household goods has gone up 482%, the cost of a four year education has gone up 994%, and the cost of an average home has gone up 917%.
In other words, in the eyes of an average worker from 1970 compared to today, the prices at the grocery store have remained largely unchanged, but the cost of an education has roughly doubled (and it’s now required if you want to earn significant money, where it wasn’t in 1970) and the cost of a home has roughly doubled as well.
If you look at it through the eyes of a minimum wage earner from 1970 compared to today, the prices at the grocery store have gone up about 30%, the cost of education has roughly tripled, and the cost of a home has roughly tripled.’[108]
Our governments encourage poorer people to get mortgages and thus keep the property market stable or climbing, even though paying off a mortgage is more stressful than it used to be because it requires a greater percentage of one’s income. They do this by providing grants,[109] tax benefits,[110] insuring banks for the mortgages they make,[111] and in some places by allowing people to use superannuation to assist in qualifying for a loan.[112] Perhaps our governments are so willing to facilitate greater ease in accessing mortgages because it helps maintain the illusion that economic conditions are as favourable to ordinary families now as they were in the 1970s,[113] and because an indentured population is more predictable and easier to manage.
From the perspective of young people facing high youth unemployment, poor working conditions, already saddled with student debt and facing unaffordable housing prices should they be willing to commit to their employer for the next 30 years, a decrease in housing prices to a sane level would be good. Particularly since today rent prices do bear some relationship to property prices, so even finding an affordable place to rent is harder when property prices are high. However, the usury system of indebting a large percentage of the population with stable employment from a relatively young age means that by the time those people become the generation with political and bureaucratic influence, they are already beginning to benefit from the increasing property prices. By then, their houses have begun to be worth more than they are paying for them. This system progressively buys off each generation at the expense of the next. One can only marvel at the efficiency with which it has been done.
The Urban Usury Black Hole
It is accepted as a brute fact of the modern world that large cities get larger while small towns slowly die.[114] Today we seem to have enormous cities continually sucking pleasant villages and countryside into the black hole of boring outer suburban housing lots, leaving nothing but isolated countryside populated by a few dwindling towns. It is worth considering which factors lead to this persistent outcome, and whether they could be changed. Surely a better pattern of human habitation would be many smaller towns and villages sprinkled at regular intervals through farming and wilderness areas, with a few larger cities on major trade routes. Usury ensures we continually tend towards the mega-cities-in-wasteland option.
If one is in debt, one needs an income to service that debt. Most people receive that income through employment. This means most people are going to have to live in or near centres of employment. In fact, it is helpful for them to live near large population centres because they provide the largest employment markets, and thus represent the best chance of finding another job quickly and continuing to service one’s debt should one become unemployed. As Hülsmann states, households
cannot withstand any significant time, months, years without income, because you need to serve huge debts that you’ve taken out to pay for your nice house or your nice apartment, so you need to stay close to fairly reliable labour markets. If you live in a little village outside in the country there are few employers. You are dependent on just one or two of them. If they go bust or they go out of business or the business diminishes, well your ability to serve your debt might be impaired. So therefore you have a very large incentive to remain close to urban centres where you have access also to medical infrastructure and so on. Everything that helps you keep going.[115]
While those who rent will still need to find a way to pay for their living expenses, and will thus need to live near employment, those with the money to buy real estate outright are in a very different position from those who buy with usury. If a person could really afford land, they would have the option of purchasing away from major population centres, because they would be less bound to a job in such a centre. While they are likely to need some income, the amount necessary to support themselves when owning land outright is far smaller than that of the modern mortgage holder. In addition, by considering land away from major cities, it is possible that one may be able to purchase a large enough allotment that the property can fulfil the original purpose of land; it may actually be able to provide a margin of safety by producing food, rental income, commercial crops, or the site for a business, which, rent not having to be paid, could be very competitive.
Land away from major cities is usually cheaper than land in major urban centres. This means that those who have savings are positively encouraged to consider moving away from those urban centres. This pattern is the opposite of that which we see in the usury economy of the modern Western world, where borrowers must be in urban centres for work, but the housing market pyramid scheme means there is little affordable near their workplace, forcing ordinary buyers into the outer suburbs of those urban centres. This trend slowly increases the size of cities, particularly large cities. This leads to long commute times and worse traffic, as there is an enormous transfer of mortgagors across town twice a day every day. Bad traffic and escalating commute times lead to a lower standard of living, even for those who have not taken on a usurious loan. It is notable that if one is willing to rent, one can usually afford to live closer to the city centre, and in all probability, closer to one’s workplace, saving hours spent in frustrating, unavoidable traffic.
Usury Undermines the Independence Land Can Give
Usury’s ability to undermine the value of land has long been recognised. David Hawkes writes that ‘[a]lthough its effects spread throughout society, however, usury was also understood to be a factor behind quite a specific shift in English class relations: the flourishing of the mercantile interest at the expense of the landed.’[116]
It is legitimate and healthy for ordinary people to wish to own land and achieve a measure of financial independence. The problem is that this natural desire has been leveraged by usurers to convince the majority of the population to willingly indenture themselves for property which cannot provide the margin of safety which, it seems to me, is the ultimate appeal of owning land. Everyone wants to own their house because everyone instinctively knows that to get out of the rat race which employment has become, one needs to own land so that one does not need to pay rent. That widespread usury results in poor working conditions only makes people more desperate to get out.
The idea of owning land is that one can escape being a proletarian, and have the power to participate in the workforce voluntarily, rather than be compelled to in order to survive. As being completely self-sufficient is very difficult, almost everyone who owns land outright will still find it worth their while to engage in the market to some degree. If one owns land outright, however, one has a fall-back position if the conditions on offer are unattractive. One may have to live very modestly without regular employment, but one has the option to say no. This is the position described so well as ‘the position of fuck you’ by John Goodman’s character in the movie The Gambler;
You get up two and a half million dollars any asshole in the world knows what to do. You get a house with a twenty five year roof, an indestructible jap economy shitbox, you put the rest into the system at three to five percent to pay your taxes, and that’s your base, you get me? That’s your fortress of fucking solitude. That puts you for the rest of your life at a level of fuck you. Somebody wants you to do something? Fuck you. Boss pisses you off? Fuck you. Own your house, have a couple bucks in the bank, don’t drink. That’s all I have to say to anybody at any social level.[117]
You will note, however, the ‘position of fuck you’ described here depends upon owning a suburban house and having something like a million dollars earning interest or dividends to be able to pay taxes, and presumably to provide an income to live on. This is exactly the problem with the modern mortgage. One could understand people taking on a usurious loan in order to own 200 acres of productive land and a country house, but the suburban properties people sell their freedom for today will only result in a ‘position of fuck you’ if one also has an additional and substantial source of income through other assets, which they do not.
The properties for which people accept a mortgage today can rarely support a person without their also having a job. They are too small to provide sufficient food and they are unable to provide rental income while simultaneously housing the occupant’s own family. If one really owned the property outright, one’s cost of living would be reduced, but one would still require a significant income to supply food, utilities, council rates and property taxes, aside from things like clothes and a social life. Nor is the average home for which a person indentures themselves usually especially attractive or well made. Should a person indenture themselves for a flat, unit or apartment, the kind of ‘ownership’ they will have may be less than freehold. Common areas and exteriors may be managed by a group, and the individual owner may be required to pay for maintenance of those areas. While some may not mind such restrictions, the idea of having to attend committee meetings where the use of compulsory fees is discussed, while not being able to alter or improve the building one supposedly ‘owns’ in any substantial way sounds highly unappealing to me. The mortgaged commonhold, condominium or strata title owner enjoys a sad parody of the ownership which was once the right of all those living under English common law, where ownership of land went from the heavens to the centre of the earth, and included all the minerals and resources found in it.[118]
Usury Funds Bad Architecture
The fact that houses are usually mortgaged also means that they must be easily disposable to cover the debt should the mortgagor be unable to pay. This means banks will be reluctant to finance anything unusual, and that the mortgagor may prefer to buy something which is fairly similar to other houses on the market, ensuring they can accurately predict the price of the house should they wish to sell it, and that it will be easy to sell. As Guido Hülsmann explains, this encourages the houses built and bought to be fairly similar, and similar in a way the appeals to the lowest common denominator, not the personal taste of the owner.[119] This means that even as an indentured ‘owner’ one still lives in a house which is fully as bland as everybody else’s. If one actually had the money to purchase and build a house outright however, ‘because it is a long term investment which will benefit yourself but also future generations of your family, you try to build the house up to the best standards to your own taste’.[120] Where everything is financed by debt ‘things become more standardised, more modernised and in a word, less appealing, shall we say, ugly.’[121]
The majority of houses financed by usury are not attractive. That usury will tend to make taste worse has already been discussed. This is generally evident in the kind of houses which are built with usurious money. An inner city workers’ cottage, intended to be rented by tradesmen in the late 19th century, is today eagerly purchased and occupied by comparatively wealthy professionals, as the workmanship and charm are so superior to modern houses built in the reign of usury. This is a strange commentary on the housing market today. Now property investors, who do not actually have the money to buy land and build, take out a usurious loan and build the cheapest possible houses with the smallest necessary sprinkling of fashion to make them palatable to buyers or tenants. Those buyers buy, not because they like the product particularly, but because these are the cheapest option available, and the housing pyramid scheme combined with inflation makes it seem vitally important to get into the property market in any form now, rather than save for something better, because of the fear that property prices will outstrip one’s ability to save even with a decent income.
Further, the fact that people who own ‘investment properties’ cannot actually afford them means that rentals can be depressing, with no attempt to make them comfortable or homelike for the tenant. The cheapest fixtures are chosen with the goal of offending no potential tenants, and of being easy to replace and maintain. Grey linoleum, carpet and tiles, surgical white walls, with no hooks provided and a term in the lease stating temporary hooks cannot be used, no substantial fence to provide privacy, no pets allowed and nothing living in the yard which could potentially need care or be a source of joy is not an unusual offering. The modern ‘property investor’ landlord has no care for the wellbeing of his tenants beyond those imposed by law, and makes no bones about the fact that his whole purpose is to use the tenants to pay his second mortgage so that one day he will be considered successful. The fact that some rental properties can be depressing further encourages people to get a mortgage. Fortunately, however, this is not the whole rental market, and there remain houses which possess some appeal, should one be willing to wait for them.
Relationship with Inflation
Usury, in the housing market especially, has a symbiotic relationship with inflation. Inflation is an expansion of the money supply.[122] Today, where money is either paper money or numbers in a computer, the money supply is usually expanded by either printing more money or increasing the numbers on the computer. Where the money supply is increased without a proportionate increase in human productive capacity or real value, as is usually the case when these two methods are used, the additional money does not mean everyone becomes wealthier. Instead, such an increase makes each unit of the currency worth less.[123] After more money has been manufactured, it will take more units of that inflated currency to buy something than before the inflationary event.
Jörg Guido Hülsmann presents his investigation of the cultural effects of inflation in his book The Ethics of Money Production. He has also given two lectures covering similar material, which include some analysis which is not covered in his book. Those lectures are available here and here. Much of his work on the cultural effects of inflation also applies to usury because of the close relationship between the two phenomena, which is explained below. Some of his analysis of the cultural and spiritual effects of inflation, while very interesting, is not central enough to this already long article to be covered here, although I do encourage those interested to read his book or listen to his lectures. As he himself points out, analysis of the cultural effects of economic policies is quite rare.[124]
Hülsmann argues that inflation is bad because it devalues the currency, and thus any savings held in that currency.[125] What you worked to save in the past is made less valuable, and will buy less when you go to spend it than it did when you got it. That governments in the west have consistently inflated their currencies since at least the Second World War is evident by the large change in purchasing power of our money from that of our grandparents’ day.[126] This gradual devaluation of savings is clearly bad for the saver, who is forced to store their saving in forms other than money, or see its value gradually diminish, but is obviously good for anyone in debt. The debtor, who has no savings to devalue, instead sees their debt slowly decrease in value. Debt which required a large proportion of their income to service gradually requires a smaller proportion, if wages keep some pace with inflation, which they generally do.[127] If a large percentage of the population is in debt they are unlikely to be concerned if their government decides to engage in large scale inflation, as they can expect to benefit from this policy over time.
One reason for which governments like to engage in inflation is that the devaluing effect of inflation is not evenly applied.[128] It takes time for prices to reflect the new monetary value after inflation. Those who get the new money first will be able to spend it before the price level has adjusted to the increase in the money supply. They will be able to buy at the old prices with the newly created money. As the money slowly spreads through the economy prices gradually begin to increase to compensate for the new money.[129] The governments who create the new money obviously get to spend it first, and thus gain a benefit which the average person down the money supply chain will not receive. Inflation ‘therefore redistributes real income from later to earlier owners of the new money.’[130] This allows the creators of new money to spend wealth which comes from devaluing the currency, and hence the value of savings held in that currency. ‘The printing press allows the government to tap the property of its people without having obtained their consent, and in fact against their wishes.’[131] As John Maynard Keynes wrote: ‘There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.’[132]
Usury has a symbiotic relationship with inflation because while debt makes people happy about inflation, inflation makes people willing to engage in debt of all kinds, including usury, which is likely to be the only kind of debt on offer to those who do not already own substantial assets. Why are people willing to take on a mortgage and pay interest which, at current rates,[133] will ensure they are paying 1.5 times as much for the property over the duration of the loan as its sale value? They are willing to do so because they are banking on inflation ensuring that their decision ultimately makes them money. They see house prices going steadily upwards and they realise that if they continue saving at the rate at which they are, by the time they have saved enough to buy property outright at current prices, those same properties will be selling for far more that they are now, and they will not be able to afford them. If they get a mortgage and go into debt now however, they will have no savings which can decrease in value, and instead their debt will become increasingly easy to service.[134] While they will pay far more for the house than it is actually worth in today’s prices, once they have paid it off they expect that the house will then sell for more than what they paid for it, because of the housing pyramid scheme, widespread usury and inflation. If there were no inflation people would be far more reluctant to indenture themselves for such a long time in order to buy something which they could have owned outright sooner by saving the money instead, since they would then avoid paying any interest. Inflation therefore acts as a major encouragement for people to take on usurious debt.
As Hülsmann points out, understanding these matters leads to a rationality trap.[135] While we can see that usury and inflation put our societies on bad trajectories, and that if these trends continue future generations will face even less affordable housing, worse working conditions, more congested cities and less leisure time, in short, lower standards of living in general, we can also see that if we choose to engage in a usurious mortgage we may personally profit so long as we can rely on people continuing to buy into the scheme in the future. Before signing up for the largest loan on a non-depreciating asset which we can service, however, we should consider some of the other corrupting effects that usury and inflation have on society.
Inflation Lowers Quality
One way for sellers to deal with inflation, which causes the prices they pay to produce a product to slowly increase over time, is to raise the price of that product periodically. However, people accustomed to paying a given price for something are often reluctant to pay more for the same thing. One way of getting around this problem is technical innovation. New processes may be developed which save money, allowing the seller to continue selling at the old price while maintaining their profit. Not all industries can rely on technological progress to decrease their costs however. Another way that the seller can continue charging the same price and make the same profit in an inflationary environment is to lower the quality of the good produced. I believe we can see a lowering in the quality of goods and services impacting our societies everywhere.
Consider the quality of houses built now compared to the workers cottages mentioned earlier. The house gets built. It generally works. It may even be larger and have more modern amenities, such as electricity and indoor bathrooms than its older counterpart. However, it has been built as cheaply as possible. No one now, it seems, can afford to build high ceilings, or afford any decorative flourishes in plaster or brick work. The worker’s cottage had walls entirely of double brick. The modern house’s interior walls are all plasterboard and insulation. The same trend is seen everywhere. While much money is spent, nothing is built with the same quality as everything built before the First World War. A friend who works in the construction industry told me that when heritage houses are renovated or imitations are built today, they use rendered or painted foam to ape the original materials. Today people can afford to build larger houses with two or three car enclosed garages, but only by taking on large loans and seriously degrading the quality of the house produced.
Occasionally in China, a large building will simply collapse, and everyone will shake their heads and be glad they live in the West. Unfortunately, we are beginning to have the same problem, as shown by several large, recently constructed apartment towers’ being found unsafe in Canada[136] and Australia.[137] This is happening in spite of increased building regulation. Usury increases this trend towards poor quality, both by ensuring more people are in favour of inflation, and by ensuring that more people are in debt, cannot really afford to do what they are doing, and can only manage by cutting corners. Usury also means there is a market for the poor quality buildings which developers produce. I don’t believe the majority of people buy new units and apartments with the intention of living in them for the rest of their lives. They are bought as starter homes, the cheapest way into the market in order to begin benefiting from inflation. If usury were not practiced it would be hard to convince someone who had actually saved several hundred thousand dollars to hand it all over for a charmless subdivision or apartment, and live in that for the foreseeable future.
Culture of Fake Concern and Monitoring of Others
Indebtedness, encouraged by inflation and made possible through legal usury in a way that it would not be without it, increases market interdependence, which is to say it decreases independence. Hülsmann argues that when everyone’s finances depend on everyone else’s, as they are all interwoven in complicated debt relationships, a culture of monitoring and fake concern for others is created.[138] This is not a genuine interest in the welfare of another, but a calculating, anxious watching for the smallest sign of weakness which might eventually be one’s own undoing. In contrast, if everyone has savings, or valuable assets, rather than debts and credits, everyone can be that much less concerned about everybody else, because one’s own financial position does not depend so much upon others.
This culture of fake concern can perhaps be best observed in corporate culture. Large corporations will have policies which mouth empty platitudes to inclusiveness, care and mutual respect, but only the very naive feel reassured by these policies. These policies are not designed to make the workplace better for the majority of employees, and it is possible that they actually expand the acceptable sphere under which one can be monitored by an employer. One is monitored for signals of self-confidence, independence, or a lack of desperation. Any sign that you are not ideologically committed to working at the company is, to the company, a sign of weakness. If you don’t care about your job beyond the pay and conditions, then if the company needs you to work unpaid overtime to finish a job which they did not allow sufficient time for, you might not do it. Therefore companies carefully screen potential and current employees for signs they may not be irrationally enthusiastic about their job.
Negative Effects of Usury on Families
Today many families use two incomes to support the loans necessary to maintain the illusion that they have the same standard of living as their parents’ generation. As Schor says, ‘[b]y adding a second income or increasing the wife’s hours, many families have averted a real decline in their material standard of living.’[139] We have already covered that usury is stressful for the borrower, and tends to make the debtor desperate and dependent, which is especially true when both parents must work long hours to service usurious debt. In addition, bringing wives and mothers into the workforce has negative effects on the family. Children get in the way of the second income necessary to service the family’s loans, inclining families in cultures where usury has been normalised to fewer children, as demonstrated by the low fertility rate in Western countries.[140]
Having to return to work shortly after giving birth also limits the time a mother can spend breastfeeding. As I explained in a previous article, breastfeeding is good for the health of mother and child; benefits which both will miss out on if forced to use formula. Anthropological studies on many different tribes and from many eras of history, including today, provide evidence for considering two to three years of breastfeeding to be ideal. Additionally, breastfeeding done at sufficiently frequent intervals has a natural contraceptive effect, which allows the mother adequate time and nutritional reserves to care for herself and the current child before bringing another into the world. The !Kung Kalahari bushwomen of Africa average a child every 3.8 years by frequently breastfeeding for two or three years without using any artificial contraception or abstaining,[141] and modern Western women practicing ecological breastfeeding have shown that the contraceptive effect of frequent breastfeeding can work for them today, as can be seen in the comments on this article.
The loss of this natural contraceptive function from breastfeeding is likely to increase the use of artificial contraception in order to prevent the mother from being overwhelmed by unnaturally frequent pregnancies, which will be especially inconvenient if the mother needs to work to pay a mortgage. Many artificial contraceptives involve dosing women with oestrogen. Prolonged exposure to oestrogen has many harmful effects.[142] Artificial contraception is also against Catholic moral teaching,[143] and should not be necessary if we allow the human body and the family to operate naturally, but engaging in usurious loans which depend upon dual incomes makes this much harder to achieve.
To run a household well requires time. If the mother, who traditionally held the role of running the household, has less time to do this, both parents will tend to lose free time after work, as it will now be taken up with essential household tasks. This leads to both parents losing the time and energy to develop interests outside of work and enjoy leisure, as mentioned above. Schor quotes a man who worked in a shoe factory in England who had become used to working very long hours saying ‘[m]e, when I’m not working, I don’t know what to do, I’m bored stiff, I’m better off at work.’[144] According to Pieper, in those who lack real leisure, ‘[m]ere time-killing and boredom gain ground, which are directly related to the absence of leisure, for only someone who has lost the spiritual power to be at leisure can be bored.’[145]
Big business is happy to have women forced into the workforce because, in general, they are more easily stressed, and are even less likely to make demands of their employers than men. I know of a shop manager who once stated that he only employs women because they will do whatever he says. He found men harder to manage because they were more likely to resist demands they considered unreasonable. Usury forces the more vulnerable and empathetic sex into the workforce, depriving children of important development time with their mother and creating stressed women who are taken advantage of by unscrupulous employers and managers. Governments are happy for women to be in paid employment because it expands their tax revenue. Instead of collecting income tax from one man, they can now tax the man’s income, his wife’s income and the income of the childcare workers who are now paid to mind his children. The combination of worse working conditions brought about by usury, the feeling of being trapped because of one’s mortgage, the disorder brought about by insufficient time to run a household properly, the anxiety about missing time with one’s children and a lack of leisure all place stress on marriages.[146]
The double income also increases the likelihood that children will be forced into childcare, sometimes from a very young age. One cannot help but suspect that separating infants from their mothers and placing them in long hours of impersonal group care could not encourage optimal development for the infant, and could not be good for the family as a whole. This common sense feeling has some evidence to support it.[147] A large, long term study on the introduction of a cheap, government subsidised universal child care program in Quebec found
… striking evidence that children’s outcomes have worsened since the program was introduced. We also find suggestive evidence that families we study became more strained with the introduction of the program. This is manifested in increased aggressiveness and anxiety for the children, more hostile, less consistent parenting for the adults, and worse adult mental health and relationship satisfaction.[148]
This article covers several good quality studies which demonstrate a negative impact of extensive childcare on children, as well as discussing political factors and potential biases which may affect childcare studies, and how those studies are reported by the media:
The media, which seemingly report constantly on alarming new risks to children, rarely present the public with information from studies on the impact of daycare, especially when the findings suggest that daycare is associated with significant negative outcomes.
The reasons for this are several, and are understandable. Many reporters may be reluctant to highlight such studies because of the politically charged nature of the issue. Some may worry that acknowledging any downsides to daycare would impede the cause of women’s equality, by inviting people to conclude that children would be better off if mothers dropped out of the workforce. And many journalists send their kids to daycare, and therefore may be predisposed to overlook negative findings about a choice they have already made for their own children.
A deeper reason may be that the psychologists who study daycare have attempted to downplay or put a comforting spin on troubling findings. Just last year, an important study found that the culturally liberal outlook of almost all social psychologists had biased the studies and conclusions they reached. It is likely that a similar outlook, and in particular an unwillingness to present findings that may interfere with women’s progress in the workplace, has similarly harmed the work of developmental psychologists regarding daycare.[149]
I should state that I am not opposed to women earning incomes, so long as it does not necessitate separating mothers from young children for hours at a time, and does not turn family life into a series of stressful events. A recent study examining the biomarkers of stress found that working mothers of young children were between 18-40% more stressed than other people.[150] It is as important for women to have leisure to develop interests as it is for men, and maintaining sufficient leisure time for both parents will become increasingly difficult as the number of hours worked between them increases.
Incidentally, the new norm of both parents engaging in regular paid work outside the home for long hours only worsens traffic and competition for jobs. I suspect more women work full- or near full-time jobs than would choose to do so without usury. I am not convinced that pressing the majority of mothers into the workforce creates any more human happiness or greater true productivity. Instead it merely forces everyone to engage in a great coordinated exchange of location and activity. Children are still cared for, but different people do the caring, and now the parents (or taxpayers) have the privilege of paying for strangers to bring up their child. More income is earned, but it is my suspicion that little of it remains in the hands of the earners as extra savings, or is even consumed in a way which produces more happiness in the lives of those with a second income than those without. More goods are produced and more hours in the workplace are worked, but the standard of living has not risen. Food is still consumed, but it is likelier to be more expensive pre-prepared food, full of questionable additives which are rarely present in home cooking. Schor adds that ‘[w]e take vacations, but we work so hard throughout the year that they become indispensable to our sanity.’[151] As the film Thank You For Smoking puts it, ‘[n]inety-nine percent of everything that is done in the world, good or bad is done to pay a mortgage. Perhaps the world would be a better place if everyone rented.’ Much of this frenzied activity is simply spinning the wheels, not leading to real improvements in people’s lives. The great game of musical chairs in which so many engage in order to pay their mortgages seems to be a more stressful way to achieve the same things at a lower standard.
The Fate of the Usurious Borrower
At the other end of family life, we can also see that usury damages the elderly. The negative effects of a lifetime of engaging in usury can be seen in the phenomenon of ‘downsizing’. Having finally paid off their 30 year loan and actually owning property, the people who have spent their working life paying usury do not know what to do with themselves. They soon sell the property in order to buy an ugly unit in a retirement home, or a slightly more fashionable serviced apartment, in order to have absolutely no responsibilities, so they can convert as much of the inflated value of their house into free cash for consumption in endless holidays. To me, this looks like a rather empty life, and signals a slow melt into irrelevance. Even when people do not “downsize”, fully-owned houses rarely seem to be passed on to the next generation in a way that makes that generation actually better off. No one seems to benefit from their parents’ having engaged in usury, even when inflation has meant that those parents have ended up profiting financially from having done so.
The lack of real leisure which results from usury has much to do with the boredom of the people who do finally get out of debt. Price Collier, an American writing about his impressions of English life at the start of the 20th century, commented;
There is no possibility of great exertion without frequent periods of rest. This is taken into account here. In England men have more avocations, more amusements, more interests outside of the daily round of pressing business than with us. These avocations demand leisure, and economy is the mother of leisure. The percentage of men – although much less than it was twenty-five years ago – who aside from their engrossing pursuits of business or profession, devote themselves to some hobby, if one may call it so, is overwhelmingly greater than with us. And one may say unreservedly that it is a good thing.[152]
One is continually reminded of “training,” in seeing how the hard-worked Englishman, whether in politics, business, literature, the civil service or in a profession, cares for himself, and is cared for in his own house. Everything bends to make him and to keep him “fit.”[153]
… domestic economy in England is devised for, and directed to the aim of making the men as capable as possible of doing their work. The home is not a play-house for the women and their friends; nor a grown-up nursery for the mother and the children, but a place of rest and comfort in which the men may renew their strength. It is possibly fair to deduce from this that house-keeping as a rule in England has a more definite aim and consequently more system, and less waste of energy, and money, than is the case in the majority of American houses.[154]
On the Englishwoman who runs such a house, he comments, ‘she has few superiors – unless it be in France – as a domestic business manager.’[155]
Collier’s observations suggest that interests and hobbies are important to keep a person healthy for work, as well as having the benefit of making them into more interesting people, who know what they wish to do with their time outside of work. He saw a well-run house as essential to achieving the leisure time necessary to pursue such interests. In a culture where servants are extremely rare, and where it is increasingly common to have both spouses working outside the home for long hours, the conditions necessary for such leisure are decidedly lacking for many people. It is also interesting that in the life Collier outlined, the role of the housewife was by no means empty or meaningless. The housewife contributed in a very important way to the success of her husband and family through running her household carefully and economically. This is a task requiring intelligence, forethought, dedication and self-control. Further, one’s family gets to enjoy the benefits of one’s success. Such qualities are often underappreciated in the workforce today, and where one can apply them they go to benefit one’s boss, not one’s family.
In contrast, usury rewards impatience, imprudence and a superficial concern with appearances. The end result of a lifetime of work with limited leisure is that when the house is paid off and one retires, one sinks back into aimless comfort and ceases any semblance of an intellectual life. The debtor only kept going because he had to, and now that he does not, he does not know what to do with himself. Juliet Schor noted that ‘[l]ong hour jobs can reduce the value of time off the job, as the workaholic syndrome erodes people’s ability to function outside the work environment. Many people who have especially long hours find themselves unable to cope with leisure time.’[156] Freedom has been attained, but the freed man is now incapable of using it. In this way usury acts as a cap on the development of the recipient.
George Orwell did not neglect to consider the role of leisure in managing populations in Nineteen Eighty-Four.
From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent for human inequality, had disappeared. If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy and disease could be eliminated within a few generations. And in fact, without being used for any such purpose, but by a sort of automatic process – by producing wealth which it was sometimes impossible not to distribute – the machine did raise the living standards of the average human being very greatly over a period of about fifty years at the end of the nineteenth and beginning of the twentieth centuries.
In a world in which everyone worked short hours, had enough to eat, lived in a house with a bathroom and a refrigerator, and possessed a motor-car or even an aeroplane, the most obvious and perhaps the most important form of inequality would already have disappeared. …
For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away. …
To return to the agricultural past, as some thinkers about the beginning of the twentieth century dreamed of doing, was not a practicable solution. … any country which remained industrially backward was helpless in a military sense and was bound to be dominated, directly or indirectly, by its more advanced rivals.
Nor was it a satisfactory solution to keep the masses in poverty by restricting the output of goods. This happened to a great extent during the final phase of capitalism, roughly between 1920 and 1940. The economy of many countries was allowed to stagnate, land went out of cultivation, capital equipment was not added to, great blocks of the population were prevented from working and kept half alive by State charity. But this, too, entailed military weakness, and since the privations it inflicted were obviously unnecessary, it made opposition inevitable. The problem was how to keep the wheels of industry turning without increasing the real wealth of the world.[157]
Usury appears to answer to this problem admirably. Each family in the West with a mortgage and car loan working long hours produces many more goods and services, far more efficiently than ever before, and yet their debt greatly outweighs their assets. They are trapped on the treadmill of full-time (and often more than full-time) employment, frantically producing goods and services for the economy without ever accumulating real wealth which stays in the family and allows either the borrower or the next generation the leisure necessary to think about the world or their true political position. Because these loans are voluntary, no-one can be accused of keeping them in poverty.
As discussed above, not all the goods and services which the ordinary population produces in our usury economy actually contribute to real wealth, or are genuinely helpful to human beings. From the perspective of an elite interested in limiting their internal competition, however, this is a benefit. While large numbers of resources go into producing gimmicks like soft close draws and new cars with gadgets of limited utility, rather than high quality food or durable goods made of real materials instead of cheap plastics, less real wealth need be distributed, but that whirring productivity can always be turned to the production of goods of military value should the need arise.
The Fate of the Mortgaged Property
The property which cost so much time and money to acquire is rarely put to good or interesting use. The owners rarely seem to use the property to make themselves more independent. Their gardens are not generally more productive, and they look like every other house. One wonders what it was all for, if the mortgagors essentially live in the same kind of house and live the same kind of life as tenants. Surely they could have rented, worked less, had more leisure and time with their families, and their final dwelling would have been much the same. Nor do the recipients of usurious mortgages really seem to enjoy more security of tenure than tenants, as today it is less common for a couple to keep the same house until the loan is paid off. All of the things which are difficult to do in a rental property, and which make owning a house appealing, such as being able to garden, own pets, have chickens, or really improve the appearance of the house, do not seem to be much more common in owner occupied houses. The main thing that owners do to their houses that tenants do not, to my mind, is follow decorating fashions more closely. It seems a bad deal to indenture oneself for 30 years in order to have the privilege of changing the trims on your boring, low ceilinged house from bland to insipid whenever the fashion changes.
When a mortgaged house has been paid off, it rarely seems to benefit anyone in a lasting way. However they spend their time after having paid off the mortgage, eventually the owners get old and need to be cared for. The house may be sold in order to purchase a room in a nursing home, so that their family members are spared the inconvenience of having to care for them. If their children are still paying their own mortgage off, there will be no one to care for the parent at home for most of the day. Even if the children have paid off their mortgage and have retired, a lifetime of usury has usually meant they have entered the aimless travel stage of the life cycle and are too busy distracting themselves from the emptiness of their existence to want to impinge on their lifestyle by taking on an aged parent. Thus the nursing home option becomes inevitable.
The inflated worth of the house can be swallowed up in paying for one’s aged parent to be kept in a house of zombies, minded by strangers. It is my guess that any money left over from the sale of the house is eventually split between the children upon the parent’s death and put toward their mortgages. The family does not retain fully owned property, and no one gets out of the usury trap. As a consequence, usury efficiently reduces the number of alert, independent and able citizens and families, and most certainly reduces the number of such families with fully owned resources at their disposal.
Usury Turns People into Users
Usury produces a culture in which everyone tries to use everyone else to make a quick profit. It is clear how a usurious lender makes money from the borrower by charging illegitimate interest, and making the borrower pay both to have their cake and to eat it. Unfortunately, the financial elites’ habit of seeking lucrative returns without providing something valuable to society in return inclines ordinary people who are not usurers to adopt this approach as well. Everybody is increasingly encouraged to see other people only as a potential pay check. Ordinary people with reasonable incomes who decide to purchase an ‘investment property’ and then rent out a charmless dwelling in an indifferent area for the absolute maximum they can get for it are an example of this. In order to maximally benefit from inflation, they are willing to use renters to support their overleveraged property with no concern for their quality of life. They are not attempting to be a good landlord, or provide real value in the property they rent out. The net result of many people making such decisions is a worse society. Rental properties become more expensive and of a lower quality, in order that someone in a slightly more secure financial position than the renter can attempt to reap the rewards of a damaging economic practice. The landlord in that case is not a usurer, but he is becoming a user.
There are many more examples of this trend. I have already written of the employers who see their employees as a means to make a profit, and take advantage of a difficult employment market to benefit from unpaid overtime. The employer who does this is not trying to provide a decent workplace for his employees. He is not trying to provide real value to society with his business. He is solely engaged in attempting to maximise his own profits and position, and is happy to use others to achieve this.
The tendency to treat others as a means is also evidenced in people trying to make money on the internet. While I have sympathy with young people who are simply trying to find something to do to make a living which is less bad than many of the employment options they otherwise face, many people are merely looking for get-rich-quick schemes. All those financially secure people deciding to buy another property to run an AirBNB, everybody selling the latest gimmick or poorly tested supplement, are all trying to make money from others in exchange for something which isn’t ultimately valuable. I happen to think almost anything can make money if someone wants to do it properly, but few people seem to be interested in running a legitimate business and becoming a professional in their line of work. Instead, everyone wants to half do something on the side in the hope of making a quick profit without having to invest any real time, effort or capital. Properly running a legitimate business can make far more money in a far less stressful way than manically looking for the next fad to sell, but few people want to do that because the culture of usury has taught them that real success is making money for nothing.
Demoralisation
Widespread usury has a demoralising effect on reasonable people. The sensible see themselves left behind while the crazy and ignorant succeed, fuelled by cheap credit which they did not know they would be able to repay. Cultural attitudes which for most of human history have ensured their slow success, such as avoiding debt and considering risk, are now not appreciated, and those who embody reckless confidence and a concern with surface appearances only are promoted. While Shakespeare wrote one should ‘neither a borrower nor a lender be’,[158] today the usury and inflation complex ‘turns moral hazard and irresponsibility into an institution.’[159]
A usurious market actively promotes and rewards the risk taker who lacks a sufficient perspective to properly evaluate the risks he is running. This is why few businesses today seem competent once one has seen inside them, and why most small businesses seem to be run by overconfident lunatics with little idea what they are doing. The middle class, brought up with sufficient sensitivity and awareness to accurately perceive problems, self-criticise and consider risk, as well as some knowledge of the legal requirements of running a business in the West, all of which qualities would make them a competent business owner, understand the work and risk involved in starting a business. Consequently, they hesitate to do so. The chaotic cowboy, perceiving none of this, starts his business without considering any of these factors, and is financially rewarded for his lack of awareness.
A theme in F. Scott Fitzgerald’s The Beautiful and Damned is that ‘the type of man who attains commercial success seldom knows how or why, and … when he ascribes reasons, the reasons are generally inaccurate and absurd.’[160] Today, the overconfident moron finds himself successful and believes it results from some personal virtue which the careful lack, while in reality he has been promoted in spite of himself by an economic climate which rewards the reckless and short sighted. Therefore, while producing more stressful working conditions for the average worker, and less functional businesses for society, usury also demoralises reasonable people, who see the incompetent succeeding and their own prospects harmed by reason of their possessing the very qualities which should ensure their success. Perhaps we could consider this phenomenon weaponised incompetence. Demoralisation tempts one to give up and do what everyone else does. This is not the answer.
Avoiding the Usury Trap
When someone tries to get you to pay half a million dollars for the investment property which they just subdivided and built four tiny houses on, don’t buy it. This property is bad value, and will keep its mortgage holder in a state of dependence for the foreseeable future for a property which no one actually wants to live in long term. Let the developers, who are damaging the quality of our suburbs and cities, find that they cannot sell their cheap and nasty developments for the prices they were expecting. Let them go bankrupt. Bankruptcy in Western countries is usually a fairly comfortable affair, and these people clearly do not have the taste or the morals to be in a position to be altering the fabric of our cities. Keep your money, keep saving and remain free.
The fewer people who opt into the housing pyramid scheme, the less housing prices will increase. If no one will buy at the price asked, eventually that price will have to come down. I know that younger people are getting a bad deal on housing, but the more of them who refuse to buy into this system, the better off everyone will be.
It is interesting to note that Zippy Catholic argues that the best things governments could do if they really wanted a society free of usury would be to simply decline to enforce usurious loans.[161] While that would no doubt be fairly effective and good for our societies, the chances of that happening anytime soon are nil. Any move away from the usury economy is going to have to come from ordinary people recognising that usury is harmful to them. The stressed family paying a mortgage with a double income while those few children they can afford grow up in child care is already unappealing to many, as shown by rising numbers of millennials choosing to be stay-at-home-mothers.[162]
While some of the negative effects of usury have been outlined above, there still remains the natural desire to own one’s own house, and it can be difficult to see how to achieve this without getting a mortgage. It may, however, still be possible to own a house without usury.
It is important to remember that real property is one of the very few assets which appreciate in value in today’s economic climate. New motor vehicles, which are probably the second most common item bought with usury, depreciate very badly, even in spite of background inflation. The other things people use usurious loans to finance, such as new boats, jet skis, motorbikes and holidays, also depreciate or are consumed. Usury for all of these things is therefore a complete financial loss. Not only does the buyer pay far more for the item than it is worth through interest, the items themselves depreciate in value, and cannot be sold for the original price paid. These items are also optional luxury items. Many people with reasonable incomes in our societies today, habituated to the idea of usury, squander their income on these unnecessary items. If you can resist purchasing them, you can save far more than the family who indulges in new cars and exotic holidays regularly. Unfashionable second hand cars are a very good deal at the moment, as is second hand furniture, which can be much nicer than what is available new.
‘Investment properties’ financed by usury are also unprofitable in the short term. The ‘owners’ are paying more for the mortgage than they collect in rent. The property itself is making them a loss. They are relying on inflation and the property pyramid scheme to make the price of the property go up so much in the future that the profit they could make upon selling it would be enough to compensate for the costs of renting it out at a loss for many years. It is worth remembering that there are no guarantees that inflation will continue at the pace at which it has been, or that property prices will continue to spiral upwards faster than every other good in our societies. There are some serious vested interests in keeping the property market increasing, but the trends people are now relying on to make their real estate investments profitable may not eventuate. One Professor has already predicted that many homes may not be sellable for the prices which the current owners anticipate receiving in the coming decades, as younger generations may not be able to afford them.[163] For this reason one should not feel that one is missing an opportunity by failing to leverage oneself for investment properties.
Another possibility to save money to buy property without a loan is to consider living at home for longer. Many students move out in order to live with friends before they really need to. This means that single young people who could be beginning to accumulate savings are spending more on rent over their lifetimes than necessary. It can be hard to move back in with parents once one has moved out and disrupted the previously existing equilibrium. It is therefore easier to stay for longer than to count on moving back in happily later. Additionally, if one’s parents are getting to the age when they will finish paying off their mortgage, staying home may prevent thoughts of ‘downsizing’. If you are studying, staying home may also help your grades, as you will not have the burden of studying full time, working to pay rent and support yourself as well as taking on the burden of housework involved in running a house. The destruction of the university system has ensured that good grades are essential to having any hope of benefitting from a degree. For those not studying, staying home for longer will allow them to save more, and enjoy some of the benefits of living in property which doesn’t ban pets or gardening, among other things.
If one does need to move out, or already has, remember that one can usually rent something better and nearer where one works for less than mortgage repayments on a similar property. Savings in transport costs and time will improve your standard of living in comparison with that of those who have bought something boring miles from town. In contrast you will retain more independence, have greater employment options and be able to choose to work fewer hours if you want. Savings also give one a margin of safety which debtors do not have. In addition, welfare rights are usually adequate to cover one’s rent, but they may not be sufficient to keep mortgage repayments going should one become unemployed.
If you have access to welfare, don’t be afraid to use it. The economy has been rendered so bad for young people that they should look upon welfare as a small compensation for the difficulties they face, and not feel guilty for taking it. Even if you are not dealing with the youth employment market, any welfare rights you have can be looked at as a replacement for the rights to the commons and to church charity which were forcibly taken from our ancestors, as previously discussed. One should not feel guilty for using the rights that more recent generations have managed to secure for us instead.
As outlined above, the total cost of a house paid for with a 30 year mortgage actually costs something like 150% of the sale price of the house. If, over 30 years, people used to making bad financial decisions can accumulate 150% of the price of a house now, there is no reason why someone making better financial decisions cannot save the price of a house in less than 30 years. Aside from the additional cost of the mortgage compared to renting, one suspects that much additional money is spent on take away food, transport and childcare costs, and generally wasted through not having the time to be more frugal. Usury’s tendency to turn the borrower’s mind to mush and limit their ability to take advantage of opportunities which don’t provide a completely predictable income certainly doesn’t help such borrowers to make the most of their skills and talents, giving an advantage to those who refrain from indulging in usury.
Inflation does undermine one’s ability to save in official currency, which is unfortunate, but one can convert savings into goods which are less subject to inflation. While the official inflation in the West in recent years as measured by the Consumer Price Index (CPI) has been between 0-3% annually,[164] governments like to calculate inflation by measuring the price increase on particular goods, not by calculating how much new money they have created.[165] This is a popular method because it allows the calculator to massage the final rate though careful selection of the goods upon which the price change will be measured.[166] House prices are often not taken into account in the CPI, meaning that the official inflation rate given is far lower than it would be if house prices were included.[167] Statistical operations may also be performed upon whichever complex and artificial housing data is chosen to be included before the final rate is calculated.[168] One example of this in practice is found in British Columbia, Canada, where ‘[e]stablished house prices in Greater Vancouver and Victoria rose 81% and 56%, respectively, over the past 5 years [from 2018], whereas the CPI for BC rose only 7.5%.’[169]
This difficulty in saving for something which is constantly increasing in price is somewhat offset by the fact that in buying outright one only pays the asking price, not the asking price plus 50% or so more in interest. As discussed above, if one has the money to buy outright, one can also consider properties which would be inconvenient if one were going to be forced to work full time for the next 30 years to pay it off. Property can be much cheaper outside of major population centres, and more rural properties may be feasible for those buying with savings. Also bear in mind that if one has savings or assets instead of debt, one can be paid interest or earn a return on those assets.
Something I think more Westerners should consider is investing in themselves by starting their own business. This is much easier for those with savings than those with debt. If one owns a business, one has the potential to earn much more than one would as an employee, be more independent and control the conditions under which one works. The fact that cowboys with less understanding of the risks and niceties of running a good business are still successful should raise the hopes of those considering doing so. Owning a business may also enable one to employ people, including family and friends, under decent conditions. If your business is not labouring under a debt burden, or under the owner’s personal debt burden, you may have a competitive edge. The more truly well run, good value businesses which exist, the harder it will be for debt laden poorly managed businesses to compete. It is usually the worst run businesses which are the worst abusers of their workers. Having to compete with well run businesses should either reduce their market share or force them to improve, slowly improving society.
A successful business may also have assets which could form the basis for a fully secured, non-recourse, non-usurious loan. As discussed above, loans to companies, provided they are not guaranteed by a real person, are not usurious. As they are not usurious and the consequences of default are clearly understood from the beginning, their effect upon the borrower and society are not as bad.
If running a successful business without debt, providing good working conditions for employees and operating with the aim of doing something well rather than solely maximising returns sounds unrealistic, you may wish to consider the case of Germany. The people of this famously strong economy actually work fewer average annual hours than most other Western countries, and their children spend less time in school. [170] They also have lower levels of personal debt than many other economies.[171] The fact that this has resulted in one of the world’s most successful economies indicates that usury and long hours are not the basis for financial flourishing. Interestingly, along with lower levels of personal debt ‘[t]here is a culture of business owners acknowledging and rewarding the efforts of the workforce.’[172] Facts like this provide evidence for the suspicion that usury turns people into profit seeking users and then rewards those most depraved by placing them in positions of authority in our societies. In contrast, in a relatively debt free culture like Germany people behave like reasonable human beings towards each other. I am sure culture has an effect as well as usury, but usury certainly doesn’t help those cultures already inclined to be less reasonable and considerate to resist treating those they have authority over poorly.
Keeping all this in mind, it may be possible to save the money for property more effectively than the general populace considers realistic. Removing usury reveals the actual wealth of a society. If everyone realised that inflation makes it difficult for ordinary wage earners to save enough for a house which they would actually like to live in, perhaps there would be a concerted effort to change the factors at work which produce this outcome. Certainly knowing one’s true financial situation, however depressing it is compared to the delusions one had, cannot be bad for one’s future prospects. It is impossible to make wise decisions if one does not know one’s real position. I believe it is possible to live a good life without usury. In fact I believe it is harder to live a good life with usury than without it. Every single person who chooses not to engage in usury is doing good for society and making it slightly easier for others to make good decisions. If enough people make good choices all those negative trends associated with usury could slowly turn around.
Conclusion
Many cultures across time and space have felt the need to regulate the taking of interest. The Catholic Church’s definition of usury as interest charged on a mutuum loan is coherent and exact. While, according to this definition not all loans are usurious, it is clear that usury is widespread in the West today. Usury damages society by financing bad taste, creating a desperate and compliant workforce of proletarians, depriving people of leisure, creating a property pyramid scheme which drives spiralling house prices, sucking countryside into mega cities, undermining the independence that land could provide, supporting inflation and placing pressure on families. The lifestyle widespread usury encourages results in boring people who make poor use of the property they indenture themselves for, and who do not pass on the property to their family. The culture of usury turns ordinary people into users and results in the demoralisation of sensible people who see the most reckless and incompetent promoted and rewarded.
Usury is not designed for our benefit and is damaging our societies. We need to overcome the rationality trap that is offered by the inflationary housing market and choose not to contribute to the future financial hardship of the next generation by buying into the scheme. By choosing not to engage in usury we realise our true financial position. Once this is realised, we can rationally plan how to improve it. There are alternatives to the usury life cycle which can be pursued, and which may enable a determined person or family to work towards independence in a way that benefits the rest of society. The more people who make good choices, the easier it will be for others to do the same, and the better our societies will be.
[1]
Elizabethan Bishop of Salisbury, John Jewell, Exposition on Thessalonians (1584) quoted in David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 23.
[2]
See for example Decrees of the Third Lateran Council (1179), Canon 25, https://www.papalencyclicals.net/councils/ecum11.htm
[3]
Abu Umar Faruq Ahmad and M Kabir Hassan ‘Riba and Islamic Banking’, Journal of Islamic Economics, Banking and Finance (6 March 2014) 1.
[4]
Deuteronomy 23:19-20. See also Benjamin N Nelson, The Idea of Usury: From Tribal Brotherhood to Universal Otherhood (Princeton University Press, 1949), p 12-14, for discussion of the idea of the accepted stranger verses a foreigner, and Jewish permission to charge usury.
[5]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 8.
[6]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 24.
[7]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 25.
[8]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 27.
[9]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 28.
[10]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 33.
[11]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 33.
[12]
The Politics; with an English translation by H. Rackham. Cambridge, Mass., Harvard University Press, 1950. xxiii, 683 p. (Loeb Classical Library, no. 264). in John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004).
[13]
The Republic; with an English translation by Paul Shorey. Cambridge, Mass., Harvard University Press, 1970. Vols. V-VI of Plato, Works. (Loeb Classical Library, nos. 237, 276). in John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 39.
[14]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 43.
[15]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 47.
[16]
Cicero, 106-43 B.C. De Officiis; with an English translation by Walter Miller. Cambridge, Mass. Harvard University Press, 1947. 423 p. (Loeb Classical Library, no. 30) in John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 47.
[17]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 49.
[18]
‘usury’, The Oxford English Reference Dictionary (Oxford University Press, 2001 reprint), p 1591.
[19]
HourMoney Jubilee, ‘“ANY interest is usury” – E Michael Jones’, YouTube video, (posted 23 July 2019), https://www.youtube.com/watch?v=ayvrX1xiSfo.
[20]
Zippy Catholic, Usury FAQ, Question 2, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#2
[21]
Barry Nicholas, An Introduction to Roman Law, (Oxford University Press, Revised Edition, 2008), p 167.
[22]
Barry Nicholas, An Introduction to Roman Law, (Oxford University Press, Revised Edition, 2008), p 167.
[23]
Barry Nicholas, An Introduction to Roman Law, (Oxford University Press, Revised Edition, 2008), p 167.
[24]
‘Mutuum Law and Legal Definition’, USLegal.com, https://definitions.uslegal.com/m/mutuum/
[25]
Pope Benedict XIV, ‘Vix Pervenit: On Usury and Other Dishonest Profits’, (1745), Papal Encyclicals Online, https://www.papalencyclicals.net/ben14/b14vixpe.htm
[26]
Zippy Catholic, Usury FAQ, Question 4, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#4.
[27]
Pope Benedict XIV, ‘Vix pervenit, De usuris aliisque injustis quæstibus’, Domus Ecclesiae, http://www.domus-ecclesiae.de/magisterium/vix-pervenit.html
[28]
Zippy Catholic, Usury FAQ, Question 2, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#2.
[29]
Zippy Catholic, Usury FAQ, Question 2, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#2.
[30]
Zippy Catholic, Usury FAQ, Question 7, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#7
[31]
Kristor, ‘Usury versus Reality’, The Orthosphere, https://orthosphere.wordpress.com/2012/12/21/usury-versus-reality/
[32]
Kristor, ‘Usury versus Reality’, The Orthosphere, https://orthosphere.wordpress.com/2012/12/21/usury-versus-reality/
[33]
St Thomas of Aquinas, ‘Summa Theologiae’, Second Part of the Second Part, Question 78. Article 1. New Advent, https://www.newadvent.org/summa/3078.htm#article1
[34]
St Thomas of Aquinas, ‘Summa Theologiae’, Second Part of the Second Part, Question 78. Article 1. New Advent, https://www.newadvent.org/summa/3078.htm#article1
[35]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 33.
[36]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 152.
[37]
See ‘Bankruptcy’, Wikipedia, https://en.wikipedia.org/wiki/Bankruptcy.
[38]
See ‘Bankruptcy’, Wikipedia, https://en.wikipedia.org/wiki/Bankruptcy.
[39]
Carla Tardi, ‘Full-Recourse Debt Definition’, Investopedia.com, https://www.investopedia.com/terms/f/full-recourse.asp
[40]
Carla Tardi, ‘Full-Recourse Debt Definition’, Investopedia.com, https://www.investopedia.com/terms/f/full-recourse.asp
[41]
Julia Kagan, ‘Non-Recourse Debt’, investopedia.com, https://www.investopedia.com/terms/n/nonrecoursedebt.asp
[42]
See for example, ‘Secured car loans vs unsecured loans’, MacQuarie Bank, https://www.macquarie.com.au/car-loans/secured-loans-vs-unsecured-loans.html#:~:text=make%20the%20repayments.-,Secured%20car%20loans,with%20an%20unsecured%20car%20loan.; James Hurwood, ‘What’s The Difference Between Recourse And Non-Recourse Loans?’, Canstar (16 April 2018), https://www.canstar.com.au/home-loans/recourse-vs-non-recourse/
[43]
Zippy Catholic, Usury FAQ, Question 6, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#6.
[44]
Zippy Catholic, Usury FAQ, Question 6, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#6.
[45]
Ulrike Malmendier, ‘Law and Finance “at the Origin”’ Journal of Economic Literature, Vol. 47, No. 4 (December 2009), p 1076-1108, 1077.
[46]
Pope Innocent III, ‘Letter Per Vestas, to the Archbishop of Genoa’, (1206), (In: Decr.: Lib V, tit. 20, c. 7) in John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 98.
[47]
‘American Express: Personal Guarantees Put It All on the Line – but Should You?’, Wharton University of Pennsylvania (11 September 2009), https://knowledge.wharton.upenn.edu/article/personal-guarantees-put-it-all-on-the-line-but-should-you-when-applying-for-a-bank-loan-small-business-owners-are-al/
[48]
Zippy Catholic, Usury FAQ, Question 34, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#34
[49]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 33.
[50]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 96.
[51]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 23.
[52]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 42.
[53]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 80.
[54]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 80.
[55]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 80-81.
[56]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 81.
[57]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p81.
[58]
St Thomas of Aquinas, ‘Summa Theologiae’, Second Part of the Second Part, Question 78. Article 1. New Advent, https://www.newadvent.org/summa/3078.htm#article1. ‘To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice.’; Pope Benedict XIV, ‘Vix Pervenit: On Usury and Other Dishonest Profits’, (1745), Papal Encyclicals Online, https://www.papalencyclicals.net/ben14/b14vixpe.htm. ‘The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.’
[59]
Joseph C Parkinson, Material cooperation and Catholic institutions: An inquiry into traditional moral principle and its meaning for Catholic institutions today, with reference to Catholic hospitals in Australia (2001, PHD Thesis), https://researchonline.nd.edu.au/cgi/viewcontent.cgi?article=1019&context=theses, p 5; see also Joseph Delany, ‘Accomplice’, Catholic Encyclopedia (Vol. 1 1907), available at NewAdvent, https://www.newadvent.org/cathen/01100a.htm.
[60]
Catechism of the Catholic Church, Second Edition, (St Paul’s Publications, 2009), 1859.
[61]
St Thomas of Aquinas, ‘Summa Theologiae’, Second Part of the Second Part, Question 78. Article 4. New Advent, https://www.newadvent.org/summa/3078.htm#article4.
[62]
Michael Janda, ‘Full recourse home loans lower defaults but may increase risky lending’, ABC News (27 December 2017), https://www.abc.net.au/news/2017-12-27/full-recourse-loans-lower-defaults-but-may-increase-risky-loans/9276602; Janine Aron and John Muellbauer, ‘Modelling and forecasting mortgage delinquency and foreclosure in the UK’, Vox (31 August 2016), https://voxeu.org/article/mortgage-delinquency-and-foreclosure-uk; ‘The recourse and the non-recourse mortgage. Comparison between the Europe and US’, Romanian Association of Building Owners (29 August 2016), https://rabo.org.ro/2016/08/recourse-non-recourse-mortgage-comparison-europe-us/
[63]
Michael Janda, ‘Full recourse home loans lower defaults but may increase risky lending’, ABC News (27 December 2017), https://www.abc.net.au/news/2017-12-27/full-recourse-loans-lower-defaults-but-may-increase-risky-loans/9276602
[64]
See for example, ‘Secured car loans vs unsecured loans’, MacQuarie Bank, https://www.macquarie.com.au/car-loans/secured-loans-vs-unsecured-loans.html#:~:text=make%20the%20repayments.-,Secured%20car%20loans,with%20an%20unsecured%20car%20loan.; James Hurwood, ‘What’s The Difference Between Recourse And Non-Recourse Loans?’, Canstar (16 April 2018), https://www.canstar.com.au/home-loans/recourse-vs-non-recourse/
[65]
See for example, Zippy Catholic, Usury FAQ, Questions 19-23, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/
[66]
Note that in the West about a third of suburban homes are owned outright by ordinary people. See for example National Statistics, ‘English Housing Survey Headline Report 2015-16’, Department for Communities and Local Government (2017), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/658478/2015-16_EHS_Headline_Report.pdf, p 1; Jenifer Duke, ‘The Suburbs Where Half of All Homes are Mortgage Free’, Domain.com.au (29 August 2017), https://www.domain.com.au/news/the-suburbs-where-half-of-all-homes-are-mortgagefree-20170815-gxwmvh/; Mona Chalabi, ‘How Many Homeowners Have Paid Off Their Mortgage?’, fivethirtyeight.com (11 December 2014), https://fivethirtyeight.com/features/how-many-homeowners-have-paid-off-their-mortgages/.
[67]
See for example, https://www.mortgagecalculator.org/ . The figure of $162,000 is given for interest paid over a 30 year mortgage for a $300,000 house, of which $240,000 is borrowed and $60,000 is paid as deposit at an interest rate of 3.8%, suggested as normal by the calculator. This means the borrower ends up paying $462,000 for a $300,000 house, slightly over 1.5 times the sale value.
[68]
John M Houkes, An Annotated Bibliography on the History of Usury and Interest From the Earliest Times Through the Eighteenth Century (Edwin Mellen Press, 2004), p 99.
[69]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 35.
[70]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 42.
[71]
Ivan Illich, Deschooling Society (Penguin Books, 1977), p 68.
[72]
Ivan Illich, Deschooling Society (Penguin Books, 1977), p 68.
[73]
Zippy, top of Usury FAQ, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/. Although attributed to Plutarch, I cannot find the original source for this quote. It may be a translation from something in Plutarch’s essay ‘Against Borrowing Money’.
[74]
Zippy Catholic, Usury FAQ, Question 42, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#42.
[75]
Zippy Catholic, Usury FAQ, Question 34, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#34.
[76]
See for example; Paul Karp, “Epidemic of time theft’: Australians work two months’ unpaid overtime a year’, thegaurdian.com (21 November 2018), https://www.theguardian.com/australia-news/2018/nov/21/time-theft-australians-work-two-months-unpaid-overtime-a-year; Luke Darby, ‘Is your employer stealing from you?’, GQ.com (8 November 2019), https://www.gq.com/story/wage-theft.
[77]
See for example; Paul Karp, “Epidemic of time theft’: Australians work two months’ unpaid overtime a year’, thegaurdian.com (21 November 2018), https://www.theguardian.com/australia-news/2018/nov/21/time-theft-australians-work-two-months-unpaid-overtime-a-year; Luke Darby, ‘Is your employer stealing from you?’, GQ.com (8 November 2019), https://www.gq.com/story/wage-theft.
[78]
‘Unusual Employment Loans, Job stability is important!’, homeloanexperts.com.au, https://www.homeloanexperts.com.au/unusual-employment-loans/.
[79]
Zippy Usury FAQ, Qu 14, Various Errors on Moral Subjects (II), Pope Innocent XI by decree of the Holy Office, March 4, 1679 (Denzinger) https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#14
[80]
Jorg Guido Hulsman, ‘The Cultural Consequences of Fiat Money’, Youtube video of a lecture given at the Mises Institute (26 July 2014), https://www.youtube.com/watch?v=SAN5CKbZnD0, see from 38 minutes and 45 seconds.
[81]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 103.
[82]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 105.
[83]
‘proletariat’, The Oxford English Reference Dictionary (Oxford University Press, 2001 reprint), p 1155.
[84]
Josef Pieper, Leisure: The Basis of Culture, Trans. Gerald Malsbary (St. Augustine’s Press South Bend, Indiana, 1998), p 61.
[85]
Josef Pieper, Leisure: The Basis of Culture, Trans. Gerald Malsbary (St. Augustine’s Press South Bend, Indiana, 1998), p 61-62.
[86]
Josef Pieper, Leisure: The Basis of Culture, Trans. Gerald Malsbary (St. Augustine’s Press South Bend, Indiana, 1998), p 54-55.
[87]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), back cover. For the statistics Juliet Schor uses to conclude that American’s were working an extra month a year see pages 29-30.
[88]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 47.
[89]
I suggest it was the growth of usury, not the growth of world markets which led to the enclosures.
[90]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 52-53. ‘To lose control…’ quotation from comments of Christopher Hill, in Keith Thomas ‘Work and Leisure in Pre-Industrial Society,’ Past and Present 38 (December 1967), p 50-66.
[91]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 108.
[92]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 43-46, http://groups.csail.mit.edu/mac/users/rauch/worktime/hours_workweek.html#hours.
[93]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 72-73.
[94]
Neil S. Rushton and Wendy Sigle-Rushton, ‘Monastic Poor Relief in Sixteenth-Century England’, The Journal of Interdisciplinary History (Vol. 32, No. 2, Autumn, 2001), p 194.
Note also that ‘between 1536 and 1540, almost every monastery in the country was dissolved, closely followed in the early 1540s by a majority of the hospitals, which had come to be seen as special types of religious house.’ p. 196 and 215-216.
[95]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 46, 47.
[96]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 46.
[97]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 1.
[98]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 4.
[99]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 29.
[100]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 25.
[101]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 170.
[102]
Jonathan Cribb, ‘How housing has divided the young’, bbc.com (15 August 2018), https://www.bbc.com/news/business-45084530.
[103]
Wolf Richter, ‘“Where the American Dream Goes to Die”: Changes in House Prices, Rents, and Incomes since 1960 by Region & Metro’, wolfstreet.com (12 July 2019), https://wolfstreet.com/2019/07/12/changes-in-house-prices-rents-and-household-incomes-since-1960-in-the-us-by-region-and-major-metro/.
[104]
Chris Pash, ‘Here’s a look at the widening gap between wages and house prices’, businessinsider.com.au (6 March 2018), https://www.businessinsider.com.au/chart-australian-wages-house-prices-2018-3.
[105]
Andrew Woo, ‘How Have Rents Changed Since 1960?’, apartmentlist.com (14 June 2016) https://www.apartmentlist.com/rentonomics/rent-growth-since-1960/.
[106]
Patrick Sisson, ‘Why buying a house today is so much harder than in 1950’, curbed.com (10 April 2018), https://www.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill.
[107]
Patrick Sisson, ‘Why buying a house today is so much harder than in 1950’, curbed.com (10 April 2018), https://www.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill.
[108]
Trent Hamm, ‘A Dose of Financial Reality’, thesimpledollar.com (1 August 2014), https://www.thesimpledollar.com/reader-mailbag/a-dose-of-financial-reality/.
[109]
‘First-Time Home Buyer Incentive’ Government of Canada National Housing Strategy https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive.
[110]
‘Negative Gearing’, wikipedia.com, https://en.wikipedia.org/wiki/Negative_gearing.
[111]
Devon Marisa Zuegel, ‘Financing Suburbia: How government mortgage policy determined where you live’, strongtowns.org (16 August 2017), https://www.strongtowns.org/journal/2017/8/15/financing-suburbia-how-government-mortgage-policy-determined-where-youlive.
[112]
‘First home super saver scheme’ Australian Government, Australian Taxation Office, https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/.
[113]
Trent Hamm, ‘A Dose of Financial Reality’, thesimpledollar.com (1 August 2014), https://www.thesimpledollar.com/reader-mailbag/a-dose-of-financial-reality/.
[114]
Chris Gaetano, ‘Study: Big Cities Getting Bigger as Small Towns Get Smaller’, nysscpa.org (2 January 2019), https://www.nysscpa.org/news/publications/nextgen/nextgen-article/study-big-cities-getting-bigger-as-small-towns-get-smaller-010218.
[115]
Property and Freedom Society, ‘Guido Hülsmann, The Culture of Inflation’, youtube video (11 October 2015), https://youtu.be/yMAEJgx1p-c?t=1582, at 26 min 20 seconds.
[116]
David Hawkes, The Culture of Usury in Renaissance England (Palgrave MacMillan, 2010), p 100.
[117]
Omid Malekan, ‘The Position of Fuck You (John Goodman in The Gambler)’ youtube.com (17 January 2015), https://www.youtube.com/watch?v=xdfeXqHFmPI&feature=youtu.be.
[118]
See https://en.wikipedia.org/wiki/Cuius_est_solum,_eius_est_usque_ad_coelum_et_ad_inferos
The doctrine was summed up in the Latin maxim ‘cuius est solum eius est usque ad coelum et ad inferos’, meaning ‘the ownership of land extends from the heavens above down to hell.’ It is found in Blackstone (vol II, Ch 2, 18) and had been applied for centuries, although legislation has done much to undermine it.
[119]
Property and Freedom Society, ‘Guido Hülsmann, The Culture of Inflation’, youtube video, (11 October 2015), https://www.youtube.com/watch?v=yMAEJgx1p-c&t=1633s, at 27 minutes 13 seconds.
[120]
Property and Freedom Society, ‘Guido Hülsmann, The Culture of Inflation’, youtube video, (11 October 2015), https://www.youtube.com/watch?v=yMAEJgx1p-c&t=1633s, at 27 minutes 13 seconds.
[121]
Property and Freedom Society, ‘Guido Hülsmann, The Culture of Inflation’, youtube video, (11 October 2015), https://www.youtube.com/watch?v=yMAEJgx1p-c&t=1633s, at 27 minutes 13 seconds.
[122]
Ludwig von Mises, Human Action, (Liberty Fund, 2007), Reproduced from the Foundation for Economic Education’s 4th edition, edited by Bettina Bien Greaves, Vol. 4, p 949. Note that I believe this is the best definition of inflation, but I do not necessarily agree with all of the views expressed in this book, or with the libertarian program in general.
[123]
Ludwig von Mises, Human Action, (Liberty Fund, 2007), Reproduced from the Foundation for Economic Education’s 4th edition, edited by Bettina Bien Greaves, Vol. 4, p 949.
[124]
Mises Media, ‘The Cultural Consequences of Fiat Money | Jörg Guido Hülsmann’, youtube.com (4 August 2014), https://youtu.be/SAN5CKbZnD0?t=234, at 3 minutes 54 seconds.
[125]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 182.
[126]
See for example, Ian Webster, ‘Why a dollar today is worth only 7% of a dollar in 1945’, in2013dollars.com (14 July 2020), https://www.in2013dollars.com/us/inflation/1945. This website includes an inflation calculator.
[127]
Mises Media, ‘The Cultural Consequences of Fiat Money | Jörg Guido Hülsmann’, youtube.com (4 August 2014), https://youtu.be/SAN5CKbZnD0?t=1810, at 30 minutes 10 seconds.
[128]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 48.
[129]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 44.
[130]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 48.
[131]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 179.
[132]
John Maynard Keynes, The Economic Consequences of the Peace, (first published 1919, edition published 2002 available at https://socialsciences.mcmaster.ca/~econ/ugcm/3ll3/keynes/pdf%26filename%3Dpeace3.pdf), p 112.
[133]
See for example, https://www.mortgagecalculator.org/ . The figure of $162,000 is given for interest paid over a 30 year mortgage for a $300,000 house, of which $240,000 is borrowed and $60,000 is paid as deposit at an interest rate of 3.8%, suggested as normal by the calculator. This means the borrower ends up paying $462,000 for a $300,000 house, slightly over 1.5 times the sale value.
[134]
Mises Media, ‘The Cultural Consequences of Fiat Money | Jörg Guido Hülsmann’, youtube (4 August 2014), https://youtu.be/SAN5CKbZnD0?t=1810, at 30 minutes 10 seconds.
[135]
Property and Freedom Society, ‘Guido Hülsmann, The Culture of Inflation’, youtube (11 October 2015), https://youtu.be/yMAEJgx1p-c?t=1978, at 32 minutes 58 seconds.
[136]
Richard Zussman, ‘Residents forced out of structurally unsafe Langford apartment building looking for answers’, globalnew.ca (28 December 2019), https://globalnews.ca/news/6342713/langford-apartment-unsafe/.
[137]
Sean Nicholls, Sharon O’Neill and Naomi Selvaratnam, ‘A Legacy of Defects’, http://www.abc.net.au (18 August 2019), https://www.abc.net.au/news/2019-08-18/how-bad-could-the-apartment-building-crisis-be-in-your-state/11413122?nw=0.
[138]
Mises Media, ‘The Cultural Consequences of Fiat Money | Jörg Guido Hülsmann’, youtube (4 August 2014), https://youtu.be/SAN5CKbZnD0?t=2839 at 47 minutes 19 seconds.
[139]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 80.
[140]
The World Bank, ‘Fertility rate, total (births per woman)’, data.worldbank.org (2020), https://data.worldbank.org/indicator/SP.DYN.TFRT.IN.
[141]
Melvin Konner, Carol Worthman, ‘Nursing Frequency, Gonadal Function, and Birth Spacing Among !Kung Hunter-Gatherers’, Science (vol. 207, 15 February 1980), p 788-791.
[142]
Raymond Peat, ‘Aging, Estrogen and Progesterone’, raypeat.com (2006), http://raypeat.com/articles/aging/aging-estrogen-progesterone.shtml
[143]
Catechism of the Catholic Church, St Pauls (Second Edition, Pocket Edition, 2009), p 507 [2370].
[144]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 149.
[145]
Josef Pieper, Leisure: The Basis of Culture, Trans. Gerald Malsbary (St. Augustine’s Press South Bend, Indiana, 1998), p 73.
[146]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 11-12.
[147]
Jenet Erickson, ‘Measuring the Long-Term Effects of Early, Extensive Day Care’, Institute for Family Studies (28 November 2018), https://ifstudies.org/blog/measuring-the-long-term-effects-of-early-extensive-day-care.
[148]
Michael Baker, Jonathan Gruber and Kevin Milligan, ‘Universal Childcare, Maternal Labor Supply and Family Well-Being’, Journal of Political Economy (116, no. 4, August 2008), available at http://economics.mit.edu/files/3103, p 26.
[149]
Steven E Rhoads and Carrie Lukas, ‘The Uncomfortable Truth About Daycare’, Independent Women’s Forum (21 June 2016), https://www.iwf.org/2016/06/21/the-uncomfortable-truth-about-daycare/.
[150]
Jamie Doward, ‘Working mothers ‘up to 40% more stressed’ The Guardian (27 January 2019), https://www.theguardian.com/money/2019/jan/27/working-mothers-more-stressed-health.
[151]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 11-12.
[152]
Price Collier, England and the English from an American Point of View (Duckworth & Co, 1911), p 126-127.
[153]
Price Collier, England and the English from an American Point of View (Duckworth & Co, 1911), p 120-121.
[154]
Price Collier, England and the English from an American Point of View (Duckworth & Co, 1911), p 122-123.
[155]
Price Collier, England and the English from an American Point of View (Duckworth & Co, 1911), p 123.
[156]
Juliet Schor, The Overworked American: The Unexpected Decline of Leisure (Basic Books, 1992), p 65-66.
[157]
George Orwell, Nineteen Eighty-Four (Complete Works of George Orwell series 1987, Penguin Books 2008), p 197-198.
[158]
William Shakespeare, Hamlet, Prince of Denmark, The Complete Works of William Shakespeare, (Rex Library 1974), p 851.
[159]
Jörg Guido Hülsmann, The Ethics of Money Production, (Ludwig von Mises Institute, 2008), p 179.
[160]
F Scott Fitzgerald, The Beautiful and Damned, (Charles Scribner’s Sons, 1922), p 382. ‘It did not occur to Anthony that the type of man who attains commercial success seldom knows how or why, and, as in his grandfather’s case, when he ascribes reasons, the reasons are generally inaccurate and absurd.’
[161]
Zippy Catholic, Usury FAQ, Question 58, https://zippycatholic.wordpress.com/2014/11/10/usury-faq-or-money-on-the-pill/#58.
[162]
See For example, Christian Gollanyan, ‘Why millennial women want to be housewives’, New York Post, (24 May 2017), https://nypost.com/2017/05/24/im-a-millennial-woman-and-id-rather-be-a-housewife/; and Daily Mail Reporter, ‘Rise of the happy housewife: How a new wave of feminists are giving up their careers to stay at home because they WANT to’, Daily Mail (19 March 2013), https://www.dailymail.co.uk/femail/article-2295236/Rise-happy-housewife-How-new-wave-feminists-giving-careers-stay-home-WANT-to.html.
[163]
Kyle Mittan, ‘Study Predicts Millions of Unsellable Homes Could Upend Market’, The University of Arizona News (11 August 2020), https://news.arizona.edu/story/study-predicts-millions-unsellable-homes-could-upend-market.
[164]
Erin Duffin, ‘Projected annual inflation rate in the United States 2010-2021*’, Statista.com (7 May 2020), https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/; H Plecher, ‘Canada: Inflation rate from 1984 – 2021’, Statista.com (28 April 2020), https://www.statista.com/statistics/271247/inflation-rate-in-canada/; H Plecher, ‘Australia: Inflation rate from 1984 to 2024*’, Statista.com (21 April 2020), https://www.statista.com/statistics/271845/inflation-rate-in-australia/.
[165]
Ludwig von Mises, Human Action, (Liberty Fund, 2007), Reproduced from the Foundation for Economic Education’s 4th edition, edited by Bettina Bien Greaves, Vol. 2, p 423.
[166]
Ludwig von Mises, Human Action, (Liberty Fund, 2007), Reproduced from the Foundation for Economic Education’s 4th edition, edited by Bettina Bien Greaves, Vol. 2, p 423.
[167]
Floyd Norris, ‘If Home Prices Counted in Inflation’, New York Times (1 April 2011), https://www.nytimes.com/2011/04/02/business/02charts.html; David Williams, ‘How Do House Prices Affect the Consumer Price Index?’, Business Council of British Columbia (24 April 2018), https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index; Michael Janda, ‘Inflation data ‘very poor’ cost of living measure due to house price exclusion’, ABC News (20 April 2017), https://www.abc.net.au/news/2017-04-20/inflation-data-suffers-from-exclusion-of-housing/8457718.
[168]
David Williams, ‘How Do House Prices Affect the Consumer Price Index?’, Business Council of British Columbia (24 April 2018), https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index .
[169]
David Williams, ‘How Do House Prices Affect the Consumer Price Index?’, Business Council of British Columbia (24 April 2018), https://bcbc.com/insights-and-opinions/how-do-house-prices-affect-the-consumer-price-index.
[170]
Richard Anderson, ‘German economic strength: The secrets of success’, BBC News (16 August 2012), https://www.bbc.com/news/business-18868704.
[171]
Richard Anderson, ‘German economic strength: The secrets of success’, BBC News (16 August 2012), https://www.bbc.com/news/business-18868704.
[172]
Richard Anderson, ‘German economic strength: The secrets of success’, BBC News (16 August 2012), https://www.bbc.com/news/business-18868704.
Marie Adelaide 
I discovered your site today, and read several of your articles. Just wanted to let you know that I enjoyed all of them greatly. Keep it up!
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