Credit is sometimes considered a modern device, or even a modern vice. But a glance through the pages of financial history will dispel any notion of great recent novelty. Loans with interest was in general use in ancient and in medieval times and it long antedated industry, banking, even coinage and primitive forms of money. This practice may be said to have begun when the Neolithic farmer made a loan of seed to a cousin and expected more back at harvesttime. Be this as it may, moneylending has also primarily been regarded as a moral matter as the recorded legal history of several great civilizations started with elaborate regulation of credit. Indeed, hundreds of years ago, when modern finance arose in Europe, moneylenders moderated their behaviour in response to debates among the clergy about how to apply the Bible’s teachings to an increasingly complex economy.
The Review of Religions interviewed Professor David Hawkes in which he talks about his book ‘The Culture of Usury in Renaissance England’, the progressive legalization of the practice of usury/interest, and the role it may play today in the deterioration of international relations. Below is the transcript of a conversation between Professor David Hawkes and Ahmed Danyal Arif, Editor of the Economics Section for The Review of Religions.
ADA: If I can start off by asking you, Professor Hawkes, to tell us a bit more about yourself and also briefly how did the idea for this book come about?
DH: My two major research interests are early modern literary studies and Marxist critical theory, so the convergence of the two led naturally to the subject of usury. I was struck by how important usury was in Renaissance English literature: Shakespeare and Milton were both the sons of usurers, and this is reflected in their work. Above all, the history of usury seemed like a topic that should be of interest in the financialized era of the twenty-first century.
ADA: Moving on to the heart of the subject Professor Hawkes, as you certainly know, moneylending has been a taboo for most of human history. The concept of ‘usury’ has a long historical life, throughout most of which it has been understood to refer to the practice of charging financial interest in excess of the principal amount of a loan. And in more recent times, it has been defined as interest above the legal or socially acceptable rate. My question is what exactly was ‘usury’ in Renaissance England? And why was this practice viewed with suspicion?
DH: The term ‘usury’ was far broader in Renaissance England than it is today. Its primary meaning was the taking of interest on a loan of money — it didn’t matter how much. But it might also refer to the paying of interest, and since most loans were assumed to be for the purposes of immediate consumption, the borrower was assumed to be guilty of sloth or sensuality. A whole range of economic malpractice might also fall under the rubric of ‘usury,’ including the mere intention to make an excessive or illegitimate profit. And then there was an entire vista of closely related ‘sins against nature,’ such as ‘sodomy,’ which might be closely identified or even equated with usury.
In philosophical history the critique of usury begins with Aristotle, who conceived it as the unnatural reproduction of money. Because it was a purely customary or conventional phenomenon, it was a category error to treat money as if it could reproduce like a natural organism. And because the telos of money was to facilitate the exchange of objects other than itself, it was ateleological to treat it as a commodity to be exchanged.
This Aristotelian critique of usury influenced Patristic Christianity, and became canonical in the work of Aquinas. It was combined with Biblical sources like the Deuteronomic prohibition against taking interest from ‘others’ while allowing it from ‘brothers.’ In a literalist interpretation, this text provided the rationale for making the Jews into the moneylenders of Europe. Until the Reformation, Christianity formally forbade usury, following New Testament texts like Luke 3.65 (‘lend, expecting nothing in return’).
I regret that I’m not familiar enough with the history of Islam to comment, though I’m certainly interested to learn more.
ADA: So, this change of mindset must have taken ages. What happened Professor Hawkes? When and how did ‘usury’ stop being a sin and become respectable finance?
DH: It was certainly a gradual process but, in England, the change in usury’s social and moral status was at its most intense during the sixteenth and seventeenth centuries. It’s impossible to identify a single cause, but I think the discovery of America was very important. The resulting flood of precious metals monetarized the European economy, and caused inflations and debasements which made it obvious that financial value was something distinct from gold bullion. Once value becomes autonomous, it’s free of material limitations and it’s able to reproduce independently.
Logically speaking, usury never stopped being a sin. But it grew so widespread, and it became the source of so many powerful fortunes, that it became more and more difficult to criticize it and achieve any sort of power or influence. That’s still the situation today: the effects of usury are at least as pernicious as they ever were, yet the term ‘usury’ is barely heard in economic debate, even on the left. That’s a shame, and it needs to change.
ADA: And if we take a step back Professor Hawkes, can we say that, within a history of longue durée, the usurer is the precursor of capitalism? Because this economic system, despite its injustices and failings, is considered to be a part of the West’s trajectory of progress, right? I am asking because if that is the case, I can see a clear paradox here as from all contemporary points of view, the usurer in Renaissance England was a man of disgrace.
DH: If we take a really long view, it’s not a matter of ‘progress’ at all. Quite the reverse: it seems that economies regularly become ‘financialized,’ which is to say usurious, immediately prior to their decadent phase. The process is often accompanied by a rise in the social prominence of ‘sodomy,’ which is to say non-reproductive forms of sexuality. The Aristotelian logic linking usury with sodomy is confirmed by empirical evidence in classical Athens, imperial Rome, Renaissance Florence, Weimer Germany and the postmodern USA, among many other examples.
ADA: In the first chapter of your book, you write that the practice of usury ‘has become intimately familiar today, and it is so well known to us that it is widely accepted, even greeted as a friend.’ This is quite a powerful statement. Do you think a world without interest is possible when almost all money in circulation is attached to some kind of debt?
DH: It’s certainly possible, since historically speaking not all societies have tolerated usury. Far from it in fact, and even today, not all societies allow the accumulation of compound interest. The question is rather whether it’s possible to permit usury and maintain a viable society in the long term, and precedent suggests that it may not be.
ADA: With the coronavirus crisis, the richest people increased their wealth manifold, and inequality is expected to be at the forefront of economic policy debates for some time. From economists to politicians, news is spreading that a ‘marginal wealth tax’ is the only way out of our current mess and to reduce the gap between the ‘haves’ and the ‘have-nots’. I believe, like every other monotheistic religion, Islam condemns interest in all its forms and actually considers it as the culprit behind all inequality. But Islam also presents an alternative. The motive force it presents in place of interest, to move the economic wheel, is called ‘Zakat’. The general underlying idea of Zakat is that hoarding is harmful to the economy. So hoarding an excessive amount of wealth without investing it is penalized (it is a ‘tax’ on idle wealth). What counts as excessive is obviously what is beyond an agreed threshold that allows for the fulfilment of fundamental human needs of the poorest. And on closer scrutiny, this is in fact a similar principle to the operation of interest, only acting in reverse (V2:S277; V30:S40). If you hoard and don’t invest back into society — you get charged. It’s very close to that idea of ‘melting currency’ of the economist Silvio Gesell. What are your thoughts on this? Do you think Zakat is a mechanism we can consider to ‘euthanise the bad rentier’?
DH: It sounds very interesting. It sounds a little like the ‘Social Credit’ movement led by C.H. Douglas in inter-war England, and I believe Douglas was influenced by Gesell. Some of my Muslim friends don’t take or pay interest, and they seem to thrive well enough. But to my shame I really don’t know much about Islam. I will educate myself on the subject.
ADA: Lastly, with the current crisis we saw that global debt is skyrocketing ($277 trillion – 365% of GDP according to IIF). This reminded me of this little-known work ‘The Modern Idolatry’ (1934) of Jeffrey Mark where he says that: ‘The rise and the fall of civilizations are but episodes in the history of usury’. I would like to read a similar statement to you from the verses 279 and 280 of the second chapter of the Quran. It says: ‘O ye who believe! Fear Allah and give up what remains of interest, if you are truly believers. But if you do it not, then beware of war from Allah (…).’ What does that say to you? Do you think the debt burden (in the sense of the cost of servicing debt – interest) is destructive to the peace of the world and can be a factor in reaching a global destruction?
DH: Mark’s book is wonderful, it was quite influential between the wars — Ezra Pound took a lot of his ideas from Mark, for example— but it’s scandalously little-known today. Thank you for the quotation from the Quran. It clearly excoriates usury. In fact virtually every religious, ethical and philosophical system elaborated by humanity opposes interest in the strongest terms. It’s surely worth taking such a unanimous verdict very seriously. Usury commits the human race to the unceasing pursuit of economic ‘growth’, and that means that we must outstrip the planet’s resources eventually.
Usury also involves the rapid concentration of wealth in progressively fewer hands. On a global scale, that means the expropriation and impoverishment of the global south by predatory lending. Individual nations will be ruled by parasitic, unproductive and morally decadent oligarchies. Usury is the autonomous reproduction of exchange-value, and exchange-value is the objectified form of human life-activity. In the power of usury, dead human activity confronts living human beings in alien and hostile form. Usury is the negation of human life itself.
David Hawkes is Professor of English at Arizona State University. He is the author of seven books and the editor of three. Prof. David Hawkes attended Stanwell Comprehensive School near Cardiff, Wales. He took his B.A. at Oxford University, and his M.A., M.Phil. and Ph.D. at Columbia University.