Riveting article about usury in Gilbert magazine concerning the views on that subject of Chesterton & Belloc (or Chesterbelloc; delusions of grandeur suggest this is like Hamorama, or, as I prefer, Oramaham, though now I'm giving into self-love again.)
Here is something from Bill Powell you'll find nowhere else, I imagine:
A one-cent loan at six percent made on January 1st, 1 A.D. [would be repaid] with spheres of gold the size of this planet. Something is rotten in the state of YenMark.Well, he got my attention on the bookstore idea.
Ideally, the entire world should be living off its investments. And not working.
Wait...
Money doesn't grow. Money is a tool. It's a useful tool, but a hammer alone doesn't build a house. A hammer sits there. Money is dead. Leave a green five-dollar Lincoln alone for thirty years and you won't return to a family of baby Lincoln pennies. In a "productive" loan, all the new wealth comes from humans at work. They couldn't have done it without the lender's money, but that's why they have to give it back. It's his tool. He contributed money, he keeps his money. They created new wealth, they keep the new wealth.
Interest, then, is claiming wealth you didn't actually make. Interest, I'm afraid, has a startling similarity to theft.
In our present culture, of course, not only do I refrain from judging anyone on this score, I immediately add that many folks invest, with considerable self-denial, for the sake of their spouses, families and even charity. It would be ridiculous not to mention that I myself benefit from such generousity...
Still, what's the alternative to interest? To work for every cent we ever make? That sounds horrible. Every hour we trade for mere dollars seems consumed. We yearn for our time to grow and bear fruit.
Perhaps our craving for growth is just that - a craving for growth, a repressed agricultural impulse. The desire is good; the mistake is appropriating the fruits of fellow humans...
So imagine a world without usury. The end of all growth? Nonsense. Even lending would still be profitable. Borrowers do do things with their money. If Coca-Cola shares would bring exactly the same interest rate as a startup bookstore down the street - zero -, where would you put your money? Which would give you a greater tangible benefit? No more free money, true, but you might get a free bookstore. Down the street. And it'd be the sensible, good stewardship, warm-fuzzies-of-maturity thing to do.
Now imagine everyone investing like that.
I've never looked at interest that way, but perhaps another way to look at it is less theft as a built-in retirement plan. Young people pay their dues; they can do more work than old people. They are net borrowers until at some point they build a nest egg. Just as our capacity for work falls, our investments begin earning real money. (Ideally.)
So to even it out, young people work "for free", as we all do unless we've inherited wealth, and then as we get older we make investments that basically leverage our previous work. It may be on the backs of others, but it's not a Ponzi scheme like Social Insecurity because there is always an interest market no matter how few or many workers there are. But Social Insecurity, by contrast, depends on the ratio of active workers to retired workers.
But I do really like that bookstore example. Quality of life could be much better under some other form of economic model, though I suspect any other model is unworkable in real life.
"That's when I proffered my words of wisdom, that waste is the highest virtue one can achieve in advanced capitalist society. The fact that Japan bought Phantom jets from America and wasted vast quantities of fuel on scrambles put an extra spin in the global economy, and that extra spin lifted capitalism to yet greater heights. If you put an end to all the waste, mass panic would ensue and the global economy would go haywire. Waste is the fuel of contradiction, and contradiction activates the economy, and an active economy creates more waste." - Haruki Muramaki's "Dance, Dance, Dance"
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