USURY – The Rotten Heart of Capitalism
Is usury, the taking of interest on loans, the single greatest sin of our time?
It’s a question worth pondering as we reflect on the poverty and misery it creates. It is an issue right at the heart of the rich/poor question in our world which sees more than four billion of the world’s people going to bed hungry while a small proportion of the rest wallow in super-abundance. If we apply the principles of the common good to usury, we see it fails on every front. Usury debases human rights, breeching solidarity with other people and disempowering the poor.
Usury is at the heart of capitalism. It has made the entire Third World a slave to debt. It is a slavery that cannot be redeemed except through the good graces of the lender. The rules are too tough. Under normal circumstances, a country can never ever repay. The interest on the loan prevents it happening. It is a form of institutionalised bondage, an economic feudalism of the worst sort, which has turned whole nations into debtors’ prisons. Billions of ordinary working people are taxed to pay off the interest accrued by their governments. In the 1990s, more than $US400 billion was transferred in interest from the Third World to the industrialised world.
Thus an unprecedented group of absentee landlords including the World Bank, the IMF and international banking cartels continue to demand a return on their investment – regardless of the social consequence. The repatriation of debt continues regardless of what their demands may do to the economies of the debtor nations.
So much poverty in the world has been created and maintained by these white-collar bankers and their shareholders in the West. As Cardinal Paulo Arns of San Paulo said, ‘This debt is being repaid in blood, with the hunger and death of millions of the poor.’
What then does the Church have to say about usury or lending money at interest? Until 1821 the Church taught that taking interests on loans was sinful. In fact, she taught it was a mortal sin. Such was the gravity of the offence. The Church’s definition of usury has always been the taking of any interest at all. In contrast, the modern and commonly accepted definition of usury is to charge an excessive amount of interest.
Jesus teaches in his sermon on the Beatitudes (Matt 5) that we should lend, not only not expecting interest – a teaching he would have taken for granted – but to lend not even expecting in all instances repayment of the capital. What a foolish man! He’d never get a job in our modern economy with crazy ideas like that.
Jesus was simply calling people back to the ancient Jewish tradition that taking interest was morally wrong. In the First Testament, Ezekiel says that ‘those who hold off from evil doing, who accept no interest or usury, but keep God’s ordinances…will surely live’ (Ezekiel 19:17)
It is a tradition that the Church continued to teach for the next 1800 years. In the early Church, Clement of Alexandria specifically condemned the practice deeming it ‘not right to take usury for money, but with open hands and heart to bestow on those in need.’
Usury was condemned by the Council of Elvira (305-6) with the condemnation, ‘Should any cleric be found to have taken usury, let him be degraded and excommunicated. Moreover, should any layman prove to be a usurer…and perseveres in his evil doing, let him be excommunicated.’
Following that, usury was condemned by the Council of Carthage (348), the Council of Arles (314), the Council of Nice (325), the Council of Tarragona (516), the Council of Aix-la-Chappelle (789) and the Council of Paris (829).
The early Fathers of the Church, St Basil, St Gregory of Nyssa, St Ambrose, St Hilary, St Jerome, St Augustine and St John Chrysostom all preached strongly against the practice of usury. During the Middle Ages the Church legislated against usury by decrees of the Council of Tours (1163), the Lateran Council (1179), the Second Lateran Council (1215), the Second Council of Lyon (1274) and the Council of Vienne (1311). The Fifth Lateran Council (1512-17) defined usury as being, ‘when gain is sought to be acquired from the use of a thing not in itself useful without labour, expense or risk on the part of the lender.’
The last official ruling of the Church was issued by the Holy Office in 1821 when it declared that the making of profit from a loan was unlawful.
Well may we ask what happened between 1821 and 1917, when for the first time the Church changed to a specific teaching on usury which allowed its practice within limits. Canon Law promulgated that year and confirmed in 1983 encouraged bishops and administrators to invest the surplus revenue allowing for acceptance of legal interest.
Why this change in teaching occurred has never been fully explained. It seems to have been a gradual succumbing to the business ethics of the day. Mario Carota, a veteran campaigner against usury, says that from the 1830s on, without the Church speaking out consistently against it, people had taken a silent approval to take interest on loans. The Church got more and more involved in the stock market and loans. The Church got its biggest push at the Lateran Treaty with Mussolini. He gave them $US30 million in bonds paying interest, in return for the Vatican states and the granting of sovereignty to the Vatican. So from then on taking interest became the norm. It is a norm now institutionalised in Church practice. But does that make it right?
The Catholic Worker has long contended that until the institutional Church comes to understand the sinfulness of usury, there will be no change in the wider society. The root cause of increasing world poverty will not be addressed. It may seem to be a radical request. But weren’t all of the principal teachings of Jesus radical? Didn’t they all confront the status quo, especially when it came to his teachings on money and the treatment of the poor? After all, money is merely the grease that oils the wheels of life. Only a fool stockpiles grease.
Debate on the issue never seems to happen. Until it does, is not the Church too complicit in maintaining the wretched plight of so much of humanity?