The Dance of Death, 1474, fresco painting (Church of St. Mary, Beram, Croatia
(Translated from the French by Tom Sunic)
Ezra Pound, in his famous Canto XLV With Usura writes:
.. with usura
seeth no man Gonzaga his heirs and his concubines
no picture is made to endure nor to live with
but it is made to sell and sell quickly
with usura, sin against nature,
Is thy bread ever more of stale rags
is thy bread dry as paper,
with no mountain wheat, no strong flour
with usura the line grows thick
with usura is no clear demarcation
and no man can find site for his dwelling.
Usura slayeth the child in the womb
It stayeth the young man’s courting
It hath brought palsey to bed, lyeth
between the young bride and her bridegroom
CONTRA NATURAM
They have brought whores for Eleusis
Corpses are set to banquet
at behest of usura.
The excesses of money lending were condemned in Rome, as was witnessed by Cato, who also wrote that if the thieves of sacred objects deserve double punishment, the usurers deserve quadruple punishment. Aristotle (Politics I, X) in his denouncement of the chrematistics, i.e. the obsession with money matters, seems to be even more radical.
There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural.
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The word “interest” means making income from money (foenus or usura in Latin, tokos in Greek). It refers to how money “gives birth to its own little children.” Since the late Middle Ages, the Church, for its part, made a distinction that had hitherto been made by the Roman law regarding the lending of movable property: there are things that are consumed by use, but there are also things that can never be consumed and are therefore called commodatum (gratuitous loan of movable property to be used and returned by the borrower).
Ezra Pound (1885-1972)
To request payment for the commodatum is contrary to the common good, because money is an asset that cannot be consumed. Interest-bearing loans are condemned by the Council of Nicaea in 325 AD on the grounds of “the Holy Script“, although the Bible has never specifically condemned usury! In the twelfth century, the Church followed up on the denunciation of the chrematistics by Aristotle. Thomas Aquinas also condemned lending money at interest, with some minor reservations though, arguing that “time belongs to God only.” Islam, which is far more severe, does not even differentiate between interest and usury.
Calvin the Capitalist
The practice of lending money at interest, however, gradually took momentum in conjunction with the rise of the bourgeois class and the expansion of its mercantile values, which have been the instrument of its might ever since. From the fifteenth century onwards, banks, trading companies and later on factories, were allowed to pay for borrowed funds upon the dispensation of the king. A turning point occurred with the birth and the rise of Protestantism, especially Calvinism. John Calvin was the first theologian to adopt the practice of lending money at interest, a practice which subsequently began to spread out by means of the banking networks. With the French Revolution lending at interest became entirely free, as new banks began to sprout in large numbers, equipped with considerable funds, mainly those hat had been obtained from the speculative affairs regarding the national property. Capitalism took off—full steam ahead.
At the beginning usury simply meant interest and this regardless of the rate of interest. Today, the term “usury” is used for an excessive rate of interest tied to the money given as a loan. But usury is also the procedure that imprisons the borrower into a debt he can no longer pay off and, therefore, can no longer retrieve his property, which he earlier agreed to hand over as security pledge. This is exactly what we see happening today on a global scale.
The loans thus enable the consumption of the future at a present moment. They are based on the use of virtual money that can be updated with a new price, that is, by an interest rate. Its wide-spread use obfuscates the basic principle, i.e. that one should keep his expenditures within the limits of his resources, because one cannot live forever beyond one’s means. The rise of finance capitalism has actually encouraged this practice: there are times when the markets trade the equivalent of ten times of the world GDP — which only shows the extent of the markets’ disconnection from the real economy. At a moment when the credit system becomes a central feature of capital, one is bound to enter a vicious circle. However, to stop giving loans could result in a widespread collapse of the banking system. It is precisely by raising the spectre of such chaos that banks succeed in being constantly bailed out by their respective states.
The wide-spread of use of loans, which means lending money at interest, has been the key tool in the expansion of capitalism and in the development of consumer society after WWII. Undoubtedly, European and American households, after deciding to launch themselves into debt, had contributed, between 1948 and 1973, to the prosperity of that period which came to be known as the “Thirty Glorious Years.” Things did change, however, when the mortgage system began to replace other forms of loan. Jean-Luc Gréau writes that
the mechanism of using a mortgage as a pledge for real loans represents far more than just an easy technique of guaranteeing the borrowed money, because it disrupts the logical framework of the allocation, the assessment and the possession of granted loans [...]
Hence, moderate risk cedes its place to a risky gamble that one is prepared to take if the debtor goes bankrupt. The creditor may then tinker with the mortgage and seize the property for resale on acceptable terms.
It was this kind of manipulation with mortgages, recycled into financial assets and coupled with the increasing number of defaults by borrowers who were unable to repay their debts, which led to the crisis of the autumn of 2008. We are now observing the re-enactment of the same scenario at the expense of sovereign states facing now the national debt crisis.
We are witnessing a big return to the system of usury. What Keynes called a “regime of creditors” is equivalent to the modern definition of usury. Usurious processes can be spotted in the way that financial markets and banks snap up the real assets of indebted states and seize their goods in accordance with a debt whose principal is made up of a mountain of virtual money that will never be paid off. Shareholders and creditors are the Shylocks of our times.
However, debt is just like economic growth: neither one can last forever. “Should Europe be only committed to the finances, wrote Frédéric Lordon, “then it is about to perish by the finances.” We have been telling this for a very long time: the Money System will be destroyed by money.
Alain de Benoist (http://www.alaindebenoist.com/) is a philosopher who lives in Europe. The following editorial was first published in the quarterly Eléments (n°141, October-December 2011) under the title “Mort à crédit.” (This is also the title of the novel written by the French novelist Louis Ferdinand Céline, published in 1936, NB). (See here http://www.theoccidentalobserver.net/2010/03/louis-ferdinand-celine-%e2%80%94-an-anarcho-nationalist/).
The Joys of Jihad: Islamentable, Isatrocious, Isbetrayal
Nordics versus Implicit Jews in "The Switch"
The Roman Catholic Church’s teaching that usury is sinful and prohibited has never changed, contrary to what Judaizers of the faith have contended. American Catholics are so clueless they think usury “is no longer a sin.” Odd isnt it when the ill social effects of usury are so now apparent? And you would think the Catholic Church would see an opening here to gain some contemporary credibility. Or do they owe money now too? Seems like everyone is in hock these days and it tends to make one circumspect about challenging bankers.
There is much that can be said here, and I do not blame de Benoist for glossing in the context of a small article. One thought: as long as the market sets interest rates, the efficient use of capital will be assured (on the macro level), and many of his concerns are no concern at all.
The big problem begins when interest rates undergo price controls. This is due to either direct government intervention, or indirect intervention through the central bank. In such a case, as we have today, the market for capital becomes so distorted, and “investment” so misallocated, that we find ourselves mired within quite a grotesque situation.
Before we have a lot of silly Calvin bashing, here’s what Calvin said: (from Wikipedia)
“Calvin expressed himself on usury in a 1545 letter to a friend, Claude de Sachin, in which he criticized the use of certain passages of scripture invoked by people opposed to the charging of interest. He reinterpreted some of these passages, and suggested that others of them had been rendered irrelevant by changed conditions. He also dismissed the argument (based upon the writings of Aristotle) that it is wrong to charge interest for money because money itself is barren. He said that the walls and the roof of a house are barren, too, but it is permissible to charge someone for allowing him to use them. In the same way, money can be made fruitful.[41]
He qualified his view, however, by saying that money should be lent to people in dire need without hope of interest, while a modest interest rate of 5% should be permitted in relation to other borrowers.[42]”
My favorite Pound poem is “Brennbaum”
Brennbaum
The sky-like limpid eyes,
The circular infant’s face,
The stiffness from spats to collar
Never relaxing into grace;
The heavy memories of Horeb, Sinai and the forty years,
Showed only when the daylight fell
Level across the face
Of Brennbaum ‘The Impeccable’.
Those good-old days are long gone when Church used to hate Jews for money-lenderers (Shyloks) and usury. Now the Church and the Judeo-Christian world is controlled by the Jew bankers.
http://rehmat1.wordpress.com/2011/03/05/jewish-dissidents-want-regime-change-in-moscow/
a long-winded piece that does not quite state what usury is. I understand that the Jews’ typical interest rate historically was 40%. That is usury. However, it possesses one virtue: it raises capital. The question then is what is capital used for?
Leaving morality aside and staying technical, capital then seeks investment and profit. Nothing wrong with that. Ruinous interest rates (driving borrowers into an early grave) are arguably probably not good for an economy, assuming that many folks are so driven.
In the real world of today, the average rate of return for non-financial firms is from 5 to 20 %. I understand that only computer and telecommunications achieve that 20% rate or close to it. This also is not lending, it is production. Over the long term, the rate of profit tends to fall unless breakthrus like computers, present themselves.
Getting back to lending, one could argue that 20% interest rates like in credit cards (I understand ) are usurious. Otoh, many people just spend and spend beyond their means. Then there are the cheats, like one
White Nationalist that I know, who brags that he beat the credit card companies out of 150,000 dollars…just stiffed them. He also believes that the Sky is Falling, that everybody’s house will be worth a buck in a few years, etc. He is also a Fed nut and a gold bug. Needless to say, I have parted company with him. Maybe it never occurred to him that the rest of us pay for his larceny thru higher interest rates. He did not beat visa out of its money, he robbed his fellow whites, among others.
In the real world, credit rates reflect risk. Note the three or four % higher rates for Greece, and Spain, etc, than what Germany pays for loans. Interest rates are Good reflectors of the relative financial health of any entity, personal, or business, or gov’t.
Interesting that despite the US’s deficit troubles, the world still buys our debt and gets little for so doing (very low interest rates). Of course, the world could be wrong and the Sky will fall. Meanwhile keep buying gold but hedge it a bit with some real investments. The next big bubble-pop will be gold. J
In fact Catholic teaching did authorise compensation for lending, which is interest by another name. This stuff about Calvin is a steal from Max Weber’s unconvincing thesis about Protestantism and the Spirit of Capitalism.
Interesting piece on the history of “usury”, but I do wonder about this line:
Shareholders and creditors are the Shylocks of our times.
Huh? The earlier part about the financial system being out of control and sucking the life out of the real economy is fine, but that line needs to be refined, I think.
It suggests that the average person that is saving money or puts money in a 401K is some kind of “Shylock”. Certainly, the average couple in Middle America that have saved some money and put some in shares of various companies, cannot be called Shylocks.
I’m also not sure what is meant by the destruction of The Money System. If that means that our fiat currencies may someday become worthless, that seems possible. If you it means that all systems of money and credit will disappear – well not in a thousand years.
@Jason Speaks: @Jason Speaks: Right. Shareholders are owners of equity in a company/firm. Benoist again reveals himself as, pardon me, an idiot, a left -over once leftist whining about anybody who has saved and invested.
It is this kind of confusion driven by resentment that leads to such weirdness. Thanks for catching that line Jason. I missed it. J
If you anti-usury types are trying to prove that you are illiterate I would believe it.
It was this kind of manipulation with mortgages, recycled into financial assets and coupled with the increasing number of defaults by borrowers who were unable to repay their debts, which led to the crisis of the autumn of 2008.
Again, I forgive de Benoist for glossing, however this too must be understood in the context of government intervention in the housing market. Loans were politically motivated, and underwritten for those who could never have qualified in a “free” market unencumbered by political manipulation.
We understand that anything subsidized increases in quantity. Too, the market price (but often not the intrinsic value) of the subsidized item increases. This may at first seem counter-intuitive, but as demand increases, prices always rise if the supply cannot keep pace. We readily observe this in the “education industry” now that government is aggressively subsidizing worthless degrees aimed at people who have no business being “educated.”
Ponder the price of a 4 year degree from Harvard in African American Studies, or Women, Gender and Sexuality, and then ask yourself how in a free market these “degrees” could ever manifest, and who would ever pay top dollar for them? Only then will you begin to understand how government has essentially destroyed the education market, just as it hitherto destroyed the housing market.
Finally, de Benoist, not much of an economist, once argued for a single European currency managed by a central bank under the control of a unified European political authority. Whether he still thinks so, and, if so, under what circumstances it would be efficacious and what form it would take, I cannot say.
” although the Bible has never specifically condemned usury ! ”
==> False. Usury is ABSOLUTELY forbidden in the Bible.
” You require your brother no interest nor money, nor food, nor anything that lends itself to interest. ” Deutéronome; XXIII, 19
Usury (taking interest) is forbidden in Islam. Islamic banking concept is based on sort of ‘co-operative’ investment under which all depositers are supposed to share, both profit and loss.
Two years ago we saw how the Wall Street bankers forced the US taxpayers to pay $700 billion to compensate for the loot of their deposits by the 1% filthy rich.
http://rehmat1.wordpress.com/2008/10/04/700-billion-plus-highway-robbery/
” We readily observe this in the “education industry” now that government is aggressively subsidizing worthless degrees aimed at people who have no business being “educated.” ”
Yes, and government, in collaboration with the “education industry”, has been doing this for at least the past 60 years. Additionally, the “college degree” has been touted as a ticket to a higher standard of living for at least that long with the result that student loan debt has just surpassed credit card debt. The public has bought into this hoax in spite of the lack of jobs for graduating college students, some of whom have gone abroad looking for employment in their fields (and to escape debt). It should stand to reason that not everyone can be a corporate lawyer, doctor, engineer, computer programmer, etc., yet we pretend that all who wish to pursue these dreams should be able to do so, even at the public’s expense (who will, in the end be footing the bill when the loans are not paid by the “graduates”). Egalitarianism has a place only in religion, not in the real world. This is just one reason why a strong manufacturing base is necessary for a healthy economy-not everyone is “college material”, and there need to be decent jobs available for the average citizen. Additionally, more and more professions that require a college degree such as nursing, are taken up by foreign nationals brought in on H1-B visas (Indian nurses and computer specialists, for example as well as M.D.’s), displacing those Americans who earned degrees in the hopes of landing such work, further compounding the economic misery of our people.
Right now the entire World is looking to Germany to underwrite the unsustainable Euro by fitting up the industrious German population with the losses of the TBTF Banks and TBTF States like Greece, Ireland etc. Even Alan Greenspan has admitted the Euro was bound to fail because, ‘cultural differences between the North and Europe’s south are too great. particularly states like Germany, The Netherlands and Austria’.
Anyone with even half a brain could see this coming when the Euro was first introduced. The more I look at this, the more I am convinced it was set up deliberately for failure, in other words another swindle and by the usual suspects. I hope Frau Merkel listens to her people and tells them where to go. If she does and the entire rotten edifice begins to collapse, then the fun begins as the contagion spreads to hopelessly insolvent American Banks. We may yet see the perpetrators swinging from lamp posts.
@George: Egalitarianism has a place only in religion…
True religion is never egalitarian. It is only the liberal Christian who would ever think so.
@Floda:
The Euro was indeed a French plot against the Germans. The former resenting the strength of the Deutschmark, and the way it forced them to be more restrained in monetary policy than they would have otherwise desired. You may find Bagus’ The Tragedy of the Euro worthwhile.
http://goo.gl/PmzT4
@Joe Webb:
“In the real world, credit rates reflect risk”
Yes, there is a risk premium implicit in the interest rate, but more importantly, interest rates reflect the aggregated time preference of borrowers and lenders. When the central banks distorts yields through open market operations or QE, however, this coordinating mechanism that guides investment & saving goes awry, generating temporary bubbles.
Nasdaq 2000, housing and stock bubble 2007, and now the Treasuries bubble.
Interest predates money, and is present in the most primitive barter economies. You loan me 10 bushels of grain now, and I’ll repay you 15 after harvest in six months. Ezra Pound was no economist.
@Trenchant: “aggregated time preference” is a mouthful, but while it is true insofar as it goes, what is missing in plain english is that one investment or loan is perceived not only in terms of risk, but in terms of probable profitability. If I know my borrower has always paid his debt, has always done well with the money I have lent him, and therefore his risk is low, I will loan him as much money as I can…more or less..for a sure thing.
Interest is tandem with credit. Credit helps expand an economy. franctional reserve banking also helps expand the economy. If fractional reserve banking was a ripoff and always very profitable, we would all be bankers. However, banks fail from time to time. Why is that? Bad loans. for example if I loan 100 dollars on the ten dollars that I have in my vault, and I have ten borrowers borrowing ten dollars each, all it takes is one loan to go south to wipe me out. That is what folks seem to forget. Banking is Good, Franctional Reserve banking is Good. Jew scams are Bad. Jews are Bad. Some White bankers are Bad.
Finance Capitalism is bad. Productivist Capitalism is Good. National Capitalilsm is Good. International Capitalism is Bad unless heavily directed toward national interests. On top of national interests, it is arguable that mere mercantiism is also Bad, and that international economic relations, say between White countries should be such that mutuality is assured.
Trading with Enemies, or with neither Enemy or Friend, shoudl pass the test of relative political acceptability. Acceptability would include not pissing off anyone which could lead to war, etc. Better to avoid war when one can.
Of course, right now we are pissing off a bunch of Arabs thru our Israel connection. That is a political example of what could also be an economic example.
Thanks to all the White people who visit this great site.
I feel the need to express thanks from the truest part of my being/soul.
Want to add:
Take care of yourselves; physically, mentally, spiritually, socially, economically.
@Joe Webb:
“If fractional reserve banking was a ripoff and always very profitable, we would all be bankers. However, banks fail from time to time.”
Good luck with opening your commercial bank without a licence. Any idea what’s involved? Find that out and you’ll understand why we can’t all be bankers, and why perhaps your commercial banker makes more money than you.
F-R banks are not always profitable, the point I’ve been trying to make all along. They make illegitimate profits on conjured-up money and are very profitable for as long as the bubble they create lasts. When the bubble does burst, you are correct in saying they face failure. However, FDIC subsidizes depositors’ risk at taxpayers expense, as do the various bail-out schemes instituted after the crash. They should fail but they aren’t allowed so to do.
In the wildcat-bank days, a run would ruin the bank, a bankruptcy administrator would disburse the assets to the creditors, and the money supply would shrink, tending to negate the previous money supply growth. Producer and consumer prices went nowhere in the century preceding the Fed for that reason.
Now, if F-R banks didn’t call their accounts “deposits”, and were honest in making it clear that they were loans, and that there is no certainty the money is there at disposal, then I would cease to call the operation illegitimate, only unwise.
Credit is still possible if deposits are treated as such, and not as loans to the bank. The bank then acts as intermediary, matching borrowers and sellers for a fee, or even originating loans as principle. The amount of credit is going to be less, all things equal, because there is less money growth.
@Joe Webb:
“for example if I loan 100 dollars on the ten dollars that I have in my vault, and I have ten borrowers borrowing ten dollars each, all it takes is one loan to go south to wipe me out. That is what folks seem to forget”
It’s you who has forgotten something. The $90 you created out of thin air with your $10 of reserves have been spent by your customers and pushed up the prices of whatever they purchased with this money. Those prices are now higher for everyone else. Boom, hello!
To clarify this point of mine:
“In the wildcat-bank days, a run would ruin the bank, a bankruptcy administrator would disburse the assets to the creditors, and the money supply would shrink, tending to negate the previous money supply growth”
Money supply tends to shrink, though it’s doesn’t happen mechanistically. When the bank fails, its borrowers’ loans aren’t rolled over on expiry, and the money supply shrinks as those loans are repaid to the bankruptcy trustee. If the collapse is of a certain magnitude, other institutions may shrink their loan-books, or not renew credits, so there exists a deflationary tendency.
What’s the problem?
1. The Fed creates money out of thin air when it makes loans to other banks and the government.
2. Commercial banks also create the money that they lend. Regional Federal Reserve and commercial banks charge usury on the debt-money they lend. (Usury is the proper name for “interest” charged on money created and loaned by banks.)
3. The money to pay the usury on the debt is never created within the system. Loan repayments to the banks reduce the money supply, M1. To keep the money supply from shrinking, more borrowing is necessary.
4. This debt growth brings with it involuntary unemployment, inflation, high usury rates an reduced living standards.
What’s the solution?
National prosperity, a balanced budget and the reduction of the national debt can be achieved in two steps.
1. Congress issues constitutional interest-free loans to states and local tax-supported bodies to fund tax-payer approved capital projects as authorized by Article I, Section 8 of the U. S. Constitution (The Sovereignty Proposal).
2. The Federal Reserve Act is replaced with legislation which provides for the creation of money as a public utility. This money does not carry usury payments. It is circulated through the existing banking system under the control of governmental and mathematical law.
Peace.
Michael Santomauro
ReporterNotebook@gmail.com
The increasing ubiquity and power of smart phones will render fiat currency, fractional-reserve banking, and central banking obsolete within the next decade.
Once people are empowered to safely perform monetary transactions over secure peer-to-peer networks, the monetary monopoly will enter a death spiral. Initially, only black market and intimate personal transactions will fall off the grid, shifting more of the burden of both taxation and inflation onto those still using fiat currency for their transactions—driving many of them off the grid. Those who can’t or won’t go off the grid will wither as the shadow economy swells.
Governments which are perceived as legitimate in tribal terms and refrain from destructive levels of taxation and inflation will survive the revolution. FedGov will get Napster’d, falling into history’s dustbin alongside the music industry, the publishing industry, and numerous other enterprises unprepared for the democratization of technology.
@Trenchant: What did you think of World Bank President, Robert Zoellick (very Jewish), coming out in favor of at talks for some kind of modified gold standard last year? He is described by certain websites as a “Ultra-Zionist-Jewish-Supremacist”.
Yet he wrote:
“The scope of the changes since 1971 certainly matches those between 1945 and 1971 that prompted the shift from Bretton Woods I to II,” Mr Zoellick writes. “Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”
Another possibility is to live in a cashless society. No more bank robberies, store hold-ups, muggings (for money). A decrease of illicit gambling, prostitution and zero tax evasion. Each transaction would be in real time and recorded by a national data center with the use of “Artificial Intelligence” technology that we now have. The technology can be perfected at the level of research we did to land on the moon. Think about it. It can be done.
Peace.
Michael Santomauro
New York City
@Matt Parrott: I hope your scenario comes to pass; here is why I’m afraid it won’t:
1. Can the data transferred between smartphones or computers really be that secure from the government? I thought they had the technical power to read every email if they wanted. If they can know where I am, listen to every call, record every txt and even access the data on my phone remotely, how secure is it?
2. Even if personal transactions can take place secretly, how about paying AT&T or the Light Company or the Cable Bill? How about my home mortgage? Won’t the government still have the power to force big players to disclose all transactions, thus short-circuiting the alternative system?
3. What will this currency that people use actually be? What is it based on? Gold? If it is based on something tangible, won’t the government be able to exert dominance whenever anyone tries to actually access the underlying commodity?
I’m not hostile the idea of our monetary system being replaced – far from it! I am just curious about problems that come to mind – I am only a moderately technical person. Thanks.
@Jason Speaks:
Zoellick’s suggestion was a bit short on details. I think it was just a thought-bubble. But in a general sense, all credit to him for even toying with the idea that gold in some way be returned to the monetary sphere. Of course, there is no chance of gold being re-monetized before things get so bad the very existence of the present model is threatened. That could be some years away.
@Matt Parrott:
I think Bitcoin shows that this is an unlikely outcome.
@Michael Santomauro:
A monopoly franchise is always abused. Only competition between monies (by dint of abolishing legal tender laws) offers protection for users of money. Have you read Rothbard’s What has Government done to our Money?
http://goo.gl/SU8po
@Jason Speaks:
Encryption technology you can readily download for free is sufficient to stump the most gifted computer scientists the NSA has to offer. Furthermore, even the most trivial traffic is becoming encrypted. When I write a Facebook message to my mom while at Panera bread, my connection to Facebook is SSL encrypted and the wireless connection is encrypted in addition to that.
Much of the stuff about there being people so smart they can crack even the most advanced encryption technology is Hollywood hype. Kevin Mitnick’s “The Art of Deception” offers a good entry-level demystification of hacking and security issues.
Tens of millions of Americans already live this lifestyle under the current regime. I’m not going to spell it out for you, but folks manage.
There are a few different ways to skin this cat. BitCoin’s model is a first attempt. It wouldn’t even need to be global. For instance, people in Detroit could transact in grams of crack or any other relatively stable and relatively accessible commodity.
Trenchant,
BitCoin is just the beginning. I believe it’s struggling due to design flaws and technical obstacles which are either unique to BitCoin’s model or due to its being slightly ahead of its time. They’re just not ubiquitous and powerful enough, and the open source community isn’t quite there yet.
If one anonymous guy writing a paper and publishing a crappy little app could cause the BitCoin fad, imagine what a more sophisticated project in a more favorable context (everybody has an Android phone) could accomplish.
Remember Apple’s Newton? It wasn’t so much that it was a bad idea, the concept was just a bit ahead of where the technology was.
I’m curious to hear why you think BitCoin is falling short of the success many predicted.
@Matt Parrott:
I believe Bitcoin ran into the Misesian-Regression-Theorem-wall. In brief, that all monies, excluding those imposed by force, originate from a commodity with non-monetary value. The nexus can be severed (our present paper-monies), but it cannot be avoided.
@Matt Parrott: If that comes to pass it would be a social and political revolution. We’ve all had this dream about the end of centralization for such a long time. We see a similar decentralization process in the media as well, with new technology enabling people to set up their “TV channels” on the internet. Imagine people free to express their authentic cultural and ethnic choices.
Of course, that is the rub. FedGov and all it’s allies will come at these forces hammer and tong. I don’t know enough to know if it is technically possible, but they will certainly do everything to oppose it. It seems like there are so many chokepoints where the government can intervene.
I will start educating myself. It would be nice to be a little more “off the grid”.
The chaos that could result from the collapse of banks is greatly exaggerated. Today’s rich do not have to be rich for the general good. Replacements will step forward. Indeed the line of volunteers will be long. They will have the advantage of not being proven failures.
Bankruptcy courts are very good at sorting these sorts of things out. The useful, solvent parts of a bank will be transferred to other hands and the world will continue turning. The deadbeats who blew all the firm’s capital will end up broke, or even in prison which is where the Goldman Sachs crowd belongs.
Graveyards are full of indispensable men. There has never been one in a board room.
@Trenchant: OK, so is the Misesian-Regression-Theorem basically stating that ultimately any non-fiat currency must be based on some real underlying substance that people agree has value, such as gold or crack?
If anyone wants to redeem their digital dollars in squirrel skins, they would need the government to enforce that right – without that enforcement, the currency would be worthless. If the government says all such transactions are illegal and unenforceable, how do you maintain the value of the currency? Although, if just one country on earth did enforce the right to get your gold from the issuing digi-bank, then perhaps that would be enough to undermine the system.
“… although the Bible has never specifically condemned usury!” Not true.
Please see the following passages from the Bible: Exodus 22:25, Leviticus 25:36 and 37, Deuteronomy 23:19, 20, Deuteronomy 25:15, and Leviticus 19:36.
In the moment the Ursurers are irritated by the power and growth of Islamic Finance.
See “The War against Islamic Banking” by David A.Wemhof in “Culture Wars” Okt. 2011.
Some quotes:
“Shariah finance is a threat to Western values, human rights and US national security.” Sharia Finance Watch, Center for Security Policy (May 21, 2011) founded by Frank Gaffney, Jr
“With the surrender of the Catholics (1965) and the collapse of the Soviet Union (1991), the next obstacle to capitalism, and target of America, became Islam. The war is fought in large measure like the Cold War or World War III—psychological warfare with limited kinetic operations (that is, shooting, or bombing, or otherwise killing people). Because of the nature of Islam and the social structures of the Islamic countries, the war has to be intergenerational, and for America, it is a race against time as it collapses demographically and economically. … Islamic economic principles are consonant with the teachings of Catholicism. Islam has actually devised, and are using, financial products and economic systems based on these principles, whereas the Catholics currently are not. With nearly 1.5 billion people, most of whom are under the age of 24, and with the popularity of Islamic economic practices and products, Islam–and Moslems–are the targets of the capitalists. Like the Jewish scribes and Pharisees Christ condemned in Matthew 23:15, the capitalists `traverse sea and land to make one convert, and when that happens…make him a child of Gehenna twice as much as´ themselves. Islam–and the Moslems–are in grave danger because, quite honestly, while America has lost many battles, she has won all of her wars. Islam is fighting its greatest enemy of all time. … Catholics and Moslems have common ground in the economic arena, which is crucially important at this time of collapsing economies in the West and struggles in the Middle East, all of which affects perhaps half of the world’s population. Americanism and capitalism are not friends of either Catholicism or Islam, and though the Catholic mind is conquered by the same ideology that is now seeking to conquer the Islamic mind, Catholics should hearken to the truth in the Arabian proverb that `The enemy of my enemy is my friend.´”
David A.Wemhof
@Jason Speaks:
Money exists in lawless, government-free zones like Somalia. People can perfectly well decide whether the risk of accepting a money substitute like a digital account denominated in gold, silver (or whatever) outweighs the convenience. For much of its early history, the US had no official currency. This did not impede the explosive growth and increasing prosperity of the colony. In fact, I’d argue quite the contrary.
And yes, the Misesian regression theorem posits that to become the generally accepted means of exchange (viz. money), a good must have some prior non-monetary value. Possum skins would be the (improbable) money, having some non-monetary value as clothing, and digital accounts denominated in possum skins would be the money-substitute.
Contractual arrangements can be established without the state as monopoly enforcer. Not everything is a one-shot prisoner’s dilemma. Iterative interaction is what best describes most of life.
@m:
“True Religion”? Which one is that? No doubt all “true believers” of every stripe from Buddhist to Christian (and its hundreds of denominations) to Jainists all believe that theirs is the True Religion. I assume that you are speaking from the point of view that yours is the true religion. So, if you are focusing on Christianity then the following passage 2 Corinthians 5:14 “one man (Christ) died for all” gives the flavor of egalitarianism in the sense that all men were or are considered beneficiaries of the sacrifice that Christ offered through his death.
I thought this to be very interesting statement from the link: denouncement.
Politics of Aristotle
Hence it is evident that the state is a creation of nature, and that man is by nature a political animal. And he who by nature and not by mere accident is without a state, is either a bad man or above humanity; he is like the
“Tribeless, lawless, hearthless one, “whom Homer denounces- the natural outcast is forthwith a lover of war; he may be compared to an isolated piece at draughts.
And who could these people be…. who acuses everyone else of being evil, you quest it! A lightbulb should be going on here for everyone.
A great article about intrest and usury. The global exploitation of resoures, people, cheap labor etc. Just connect the dots…, I hope everyone has a clear vision.
“The increasing ubiquity and power of smart phones will render fiat currency, fractional-reserve banking, and central banking obsolete within the next decade.”
When fiat currency is no longer in use how will politicians accept their under-the-table bribes? The last thing that any of them want is a paper trail leading to the front door (or digital trail in this case). Everyone from corrupt judges (i,e,: Luzerne County Judge Mark Ciavarella, Jr.) to cops on the take, from drug dealers to your friendly local Ward leader all depend on cash for anonymity. Digital currency is a convenience, but it will never completely replace fiat currency.
How was Ciavarella caught? By “causing income to pass through intermediaries and causing false records to be created” according to the US District Court For the Middle District of PA in a court document filed with that District Court (he was convicted of tax evasion and wire fraud in his “kids for cash” scheme).
@Trenchant: Contractual arrangements can be established without the state as monopoly enforcer.
Can you give some real world examples, please? It seems to me, that ultimately, without the state as final enforcer, contracts fall apart. At least for anything beyond the trivial.
Nice article about what to do:
http://www.alt-market.com/articles/301-want-to-defeat-the-banks-stop-participating-in-the-system
This article is worthless because it never mentions interest rates. it is the interest rates that distinguish between moneylending and usury.
I once saw an ancient Egyptian parchment in a museum. It was a loan guarantee. The translation read 100 percent interest rates.
During medieval times, the Jewish money lenders always made a deal with the King or Duke whoever the ruler was.
Jewish interest rates were never lower than 60 percent. When possible, the ruler was bribed to allow interest rates as high as 133 percent.
I do not see how any lender could pay back a loan at 133 percent interest.
The Templars were not destroyed because of theology. They were destroyed because they were worse moneylenders than the Jews. They managed to forclose on the entire treasury of France. The equivalant of Fort Knox was moved into the Templar treasury.
That is when King Phillip went after the Templars. The entire nobility and business community of Europe cheered.
The Templars had all sorts of hidden fees and balloon payments built into their loans.
They demanded dozens of co signers on their loans. When the loans defaulted they seized the property of the co signers as well.
In 1810 England, the poet Shelly paid 400 percent interest rates to Jewish money lenders. That is why his Father disinherited him in favor of his son. Had the Father not done this, the entire estate worth about 10 million pounds in today’s money would have gone to the money lenders when Shelley died.
Why all these great intellects never thought of reasonable 5 to 10 percent interest rates by strictly enforced laws until the last 150 years is beyond me.
Interest rates will never be established on the free market.
The lenders have a monopoly. An 8 percent interest rate credit card would have lots of card holders it is true. But the credit card companies make more money with their 20 percent rates coupled with all sorts of ridiculous feees.
My credit card company started charging a $25.00 fee for absolutely no reason every January. I’m sure it will go to $35 and maybe $50 someday.
An attorney I know defends lots of loan defaulters. He always throws usury charges into his defense without even checking the details of the loan.
With all the fees and charges the loans always fit the definition of illegal usury. With all the hidden charges many loans are usury.
An article about usury and money lending without one mention of interest rates is useless.
@Joe Webb: I believe that he may be referring to the other part of the Wall Street Casino. Originally, shares were sold, and the profits of the venture were divided amongst the shareholders proportionate to the amount of money (shares) invested in the venture. As an extension of the fractional reserve banking shell game, we now have magical “share value”. A hundred people buy a hundred shares for a hundred dollars ($1 per share). The company hasn’t produced anything and has provided no service, but the company has “capitalized” $10,000 and my share is now magically worth $1.10. I sell my shares for $110 making 10% profit (interest) on a company that has produced nothing and provided no service.
Shareholder value is another term for usury.
@Jason Speaks:
http://en.wikipedia.org/wiki/Hawala
@mari:
“In 1810 England, the poet Shelly paid 400 percent interest rates to Jewish money lenders.”
Nobody forced him to indebt himself. Caveat emptor. Where both parties to the money-lending are consenting adults, no illegitimacy can be attributed to the deal.
@Rehmat: Interest is verboten in Islam, but what amounts to a capitalized lease purchase is not. In other words, if using a conventional loan of 100K with 4 7/8 percent interest creates a paymentof 726 a month then the Islamics just multiply the 726 times 360 to get a 261360 lease purchase, with 360 payments at 726!!! So they just lie there way around it!
@mari:
The fact that no line of demarcation is drawn between interest-charging and usury is not casual. It’s a purely arbitrary distinction. Consider also the creditor: some borrowers are highly unreliable, and lending to them entails risk that should be priced into the rate.
Mind you, if banking were thrown open to anyone who wished to set up business, more competition for lending services would result, catering also to those very high risk borrowers.
@Abe Goldstein:
http://www.citiislamic.com/ciib/homepage/
LOL!
@Jason Speaks:
http://en.wikipedia.org/wiki/Lex_mercatoria
I could go on and on.
@Trenchant: It just seems like this is the kind of thing people do when they can’t get a state enforcer, which is what everyone prefers.
http://bible.org/seriespage/parable-talents-matthew-2514-30-luke-1912-28
Reading the Parable of the Talents, I can find no condemnation of lending at interest.
@Jason Speaks:
So sayeth you.
“Their breath stinks for the gold and silver of the heathen; since no people under the sun always have been, still are, and always will remain more avaricious than they, as can be noticed in their cursed usury. They also find comfort with this: ‘When the Messiah comes, He shall take all the gold and silver in the world and distribute it among the Jews.’ Thus, wherever they can direct Scripture to their insatiable avarice, they wickedly do so.”
Martin Luther “The Jews and Their Lies” 1543
@Curmudgeon: One can only assume that Martin Luther King’s father hated the Jews if he named his son after such a notorious anti – semite as Martin Luther.
@Abe Goldstein: He didn’t.
http://www.snopes.com/history/american/mlking.asp
Martin Luther turned against the Jews after reading the Talmud.
The practice of money lending is basic part of the finacial system. In many cases it can be good to finance large projects that otherwise wouldn’t be accomploished without borrowing. Such as bridges, highways, relief efforts etc. Borrowing for pleasure items, that lose value, or do not help one produce income streams are very poor choices. The 30 year mortgage with compounding mortgage interest enslves the middle class, and lower class of usa. Dollar for dollar borrowed the orginal loan is repaid in just a few years, with interest, 30 years! I know many have just squated, and refused to pay, or left and let others they know live free or for a cash rent.
I challenge Mr. Benoist to document the following statement:
” John Calvin was the first theologian to adopt the practice of lending money at interest, a practice which subsequently began to spread out by means of the banking networks.”
This is a propaganda story and is completely untrue.
Michael Hoffman
@Bohemianh:
Without the implicit and explicit guarantees extended by the GSE’s, many of today’s financial products would have never existed.
Taxpayer subsidization of housing has skewed investment towards a consumer item – the family home. Money that might otherwise have gone into production goods and services.
@Jason Speaks: Trades falling apart? NS Germany traded commodity for commodity, for example coal for iron ore. The commodity is the currency. It eliminates the international banking system. Chavez’s Bolivarian Revolution is based on this Venezuelan oil to Cuba for medical services by Cuban doctors. No money changes hands – no need for bankers. That is why Chavez is in the cross-hairs, it’s a dangerous trend. That doesn’t mean Chavez isn’t skimming, by the way, it just means that he, like Gaddafi and Saddam have poked the banksters in the eye. Their thug NATO undoubtedly has him on the list to get their pound of flesh.
@Curmudgeon:
Note how many flee to Cuba on rafts, and beat the doors in reside in Venezuela.
Barter is incredibly inefficient – double coincidence of wants – and NS Germany resorted to it purely out of desperation. Without Chavez sending his subsidized oil to Cuba, ripping off his own citizens, poverty would be even more grinding on the island.
There’s a rush to reclaim lapsed foreign citizenship by Venezuelans looking for an exit from the spiral downwards.
Getting rid of financial intermediation is the surest way to de-industrialize, and that means the Malthusian scythe coming down on most people now living.
@Curmudgeon: You can barter instead of using money, but you aren’t going to maintain a very complex system for very long. There is nothing remotely evil about money or currency in and of itself. In fact, it’s a pretty great thing.
I would agree that Mr. deBenoist’s understanding of economics is rather limited. What all the attacks on interest amount to is a demand that money be a free good. The lender should risk his money with no right of return for his help in establishing a business. That is an absurd theory of money. Giving the government the right to issue currency backed by nothing is also another version of money should be a free good.
The Jews and the Templars were, of course, pushing their luck with financial rape. But none of this means that lending money at a reasonable rate of return is either immoral or unnecessary to a healthy economy.
@Trenchant: I disagree. The reason I disagree is that my loans have created NEW products and services (if they have helped found a new and successful business). Therefore, the $90 has been spent on these new goods and is not bidding up the price of the old stuff.
@Trenchant: not so. If the loans that I make bear fruit, then the new successful businesses are selling goods and services which receive that $90.00. Thus, the older goods and services remain at their current price levels.
@Curmudgeon: you claim that the company has produced nothing, but if my share has risen in value, it has only risen in value because the firm I invested in has produced and sold something of value. J
I have posted a few pieces on the Matt Parrott/Robin Hood thread on Rothbard’s The Mystery of Banking.
I have offered a few observations and invite comments. Joe
@Joe Webb:
The prices of the constituents of your new goods are affected. Your time as an inventor and the raw materials.
@Joe Webb:
No, it can also go up because their are more dollars chasing the share. If Bernanke increases the number of $ in existence, on balance prices will be higher than they otherwise would be.
If money supply were flat, share price indices (a broad proxy for the economy) wouldn’t be going up like they do today.
@Joe Webb:
I have obliged you with some answers on the Robin Hood blog.