Profitless usurer, why dost thou useSo great a sum of sums, yet canst not live?For having traffic with thy self alone,Thou of thy self thy sweet self dost deceive:Then how when nature calls thee to be gone,What acceptable audit canst thou leave?
THE USURY ERROR
It would have been a major conceptual error to allow usury to be
charged on agricultural loans denominated in metals, especially if the
interest and principal was to be paid in metal. For one thing, metals are
“barren” – they have no powers of generation. Any interest paid in them
must originate from some other source or process, outside of the bor-
rower’s understanding or control. Money and power would concentrate
in the hands of lenders.
This structural flaw was alleviated by the central authority. Although
the Royal household was the largest lender and charger of interest, it
took decisive action to minimize the harmful effects of usury, by peri-
odically declaring agricultural debt forgiveness. It also set official prices
for valuing various farm commodities, in effect monetizing them.
“In the earliest city cultures every form of exchangeable goods could
be used as money,” Heichelheim reports, estimating that 12 to 20 such
commodities were monetized. He thought that price lists such as
Hammurabi’s price tables (and those of Sumer, and of Mesopotamia)
have been misinterpreted as price controls when they are really official
exchange rates of various commodities when used as money. 13
This meant that borrowers, depending on their harvest to repay
loans, wouldn’t be harmed by seasonal market supply and demand
forces, as the increased supply from their harvest tended to push market
prices lower. Thus the effect of monetizing these commodities was to set
minimum floor prices for them, when used to repay loans.
But the usury error struck in Europe, and by the time the practice of
usury reached Greece and Rome, over a millennia later, repayment and
interest of metallic loans for agriculture were being demanded in metal
or coinage. This practice was not sustainable, and as we shall see, it led
to horrendous societal problems wherever it occurred.
The Finance Curse
THE GODS IN COUNCIL
More worth than many men.
On the seventh day of the month in the prytany of Zeus and the presidency of Posidon Apollo in the chair the following Bill introduced by Sleep was read by Momus son of Night before a true and lawful meeting of the Assembly whom Fortune direct.