Simple usury test

I’ve contended that usury is quite a bit simpler a subject than it is usually understood to be, and that preventing most of it as a practical matter would be rather straightforward.  What I haven’t done though is give you a simple test to check to see if a given proposed lending contract is usurious.  I intend to do that here.

In order to determine if a proposed contract is usurious, we need to ask the following:

1. Is profitable interest charged on the loan?
2. Has the borrower posted collateral providing security on the loan?  (Note: a corporation or partnership counts as collateral).
3. Is the lender’s recourse for recovery of principal and interest, in a case of default, limited to the named collateral and only the named collateral?

If all three of these are true, it is not usury.  If (1) is true and either (2) or (3) are false, it is usury.

Cultural Marxism in the manosphere

The thing that makes cultural Marxism laughably ridiculous is that it is basically a big fat ad hominem.  Cultural Marxism consists of a bunch of malcontents doing everything possible to avoid discussing objective truth.  Rather than focusing on what is objectively true, cultural Marxists propose that the world is all about power relations.  Discussion of power relations replaces inquiry into what is true, and victim status replaces truth.  This creates an ideological environment wherein what someone says is evaluated based on social class or group membership rather than against a standard of truth.  As a result the kind of “discussion” cultural Marxism fosters is the ultimate in preaching to the choir and shouting down the heretics: propositions are not evaluated objectively, and what a member of an oppressor class says is rejected not because it has been evaluated against objective standards but because it comes from an oppressor: ad hominem writ large.

Just as there are postmodern tendencies in the manosphere there are also, I would suggest not coincidentally, tendencies which mirror cultural Marxism.  I’ve griped before about the annoying tendency toward metanarrative: a quite laughable pseudo-analysis of the motives, psychology, and status of  discussion participants takes place in parallel to, and sometimes to the exclusion of, actual content.   Recent discussions on a vague-enough-to-be-postmodern idea that folks are labeling “the feminine imperative” seem to me to be little more than another ad hominem writ large, solipsistic over-the-Internet application of a pre-formed template to total strangers based on their outsider status, all the while ignoring the question of whether or not there is any truth, any validity, in the actual substantive content of what is contended.  As in cultural Marxism more generally what matters is not what is objectively true but how well the latest faddish term fits the victim-oppressor narrative, and how good it makes the victims and their champions feel about themselves.

John McG concretely expressed this tendency toward culturally Marxist denunciation in the comments below:

X defended Y; Y is a woman; therefore X is a “white knight”, as generally applied in the manosphere, is [not] a “righteous judgment” but rather an excuse to dismiss and stop listening to X.

I’ve got some advice for you, manosphere fellas: if you want to be taken seriously by people who care about the truth try putting some more distance between yourselves and your putative enemies.

Cynicism: the starry-eyed idealism of the nihilist

Some of the commenters on this thread (either here or in trackback) might consider the extent to which their reactions confirm Lydia’s view. By forming what amounts to a cult around a somewhat useful social analysis akin to the Meyers-Briggs test they convince themselves that they know strangers on the Internet well enough to do personal over-the-wire psychoanalysis.

I generally consider over-the-wire psychoanalysis of total strangers to be a reductio ad absurdam of the point of view expressed.

I think there are some valuable facts and insights in the manosphere. But by demonstrating the kinds of behaviors one expects from people in the grip of an ideology, manosphere commenters unwittingly show that the manosphere fosters precisely what Lydia contends it fosters in at least some men, e.g.:

A habitually cynical outlook. A continual view of sexual life as a matter of full-fledged conflict between the sexes.

and

But there are always occupational hazards in continually being immersed in certain kinds of evils. In this case, my conclusion is that the occupational hazard of being immersed (maybe perforce, because of one’s job, for example) in the situations in which women have ruined men’s lives is a particular level and type of jadedness and a damaging of that ability to see a woman as a gift.

… just as two examples.

I hate to break it to the androsphere: but realism lies somewhere in between starry-eyed idealism and black-eyed cynicism. Cynicism is just another way of refusing to come to grips with all of reality: the starry-eyed idealism of the nihilist.

And being a starry-eyed idealist about women is foolish.

[Update 1/1/2013: It has been pointed out to me that this post has a user interface design flaw which may have affected the impression it made on some people. The words “in trackback” link to two different comment threads: the first at The Woman and the Dragon, the second at Dalrock. Depending on what browser one is using and what threads one has previously visited this may not be obvious.]

Drug Detente?

Lawrence Auster proposes a set of propositions on SSRI’s and antispsychotic prescription drugs with which he hopes we can all agree:

(a) Anti-depressant drugs are greatly over-prescribed in this country, they often lead to psychotic or violent behavior, and this over-prescription should stop.

(b) It is not anti-psychotic drugs in themselves that cause psychotic or violent behavior, but the underlying psychosis that the drugs are intended to suppress. However, psychotic individuals will not voluntarily keep taking their anti-psychotic medicine, and when they go off their meds they frequently become psychotic and violent.

(c) Therefore dangerously psychotic individuals, in addition to being given anti-psychotic drugs, also need to be confined in an institution where they will be required to take the drugs and where they will not be a danger to society.

This is an excellent formulation. For my own part, I would add the following adjustment to (b) and some additional clarifications:

1. Antipsychotics are also wildly overprescribed.
2. Sometimes antipsychotic drugs (not just SSRI’s) cause violent and suicidal behavior. Sometimes benzodiazepines cause violent and suicidal behavior. Sometimes opiates cause violent and suicidal behavior. Sometimes even alcohol causes violent and suicidal behavior. In general, it should be assumed that in some number of cases a psychoactive drug will cause violent and suicidal behaviour.
3. Sometimes it is neither the drug itself nor an underlying condition in the person that causes violent and suicidal behaviour. A third kind of cause is a withdrawal syndrome from the drug, which in some cases may be protracted over a period of many months or even years, long after the drug itself has left the person’s system. A person’s body adapts to the presence of the drug, and it is these adaptations – which may take months or years for the body to reverse – which cause withdrawal symptoms. Many people have been convinced that they have lifelong depression or bipolar disorder because when they stop taking the drugs they exhibit symptoms of depression or bipolar disorder. In fact, in these cases (withdrawal syndrome cases) what is occurring is “rebound” or other withdrawal symptoms.
4. Staying on the meds is no guarantee of long term stability, because of the phenomenon of tolerance withdrawal. In tolerance withdrawal the patient’s body has adapted to the medication, and he begins to experience withdrawal symptoms even though he has not stopped taking his meds or changed his dosage. Sometimes increasing the dosage will make the symptoms disappear; sometimes increasing the dosage fails to make symptoms disappear or causes other problems due to drug toxicity.
5. Generally speaking, many people who are convinced that they have to take psychoactive drugs for the rest of their lives do not in fact have a permanent irreversible underlying condition. They think they do because doctors tell them they do, drug companies tell them they do, and when they stop or change medications they have withdrawal symptoms which get blamed on a nonexistent permanent underlying condition. Many of these people have a shortened lifespan because of drug side effects.
6. There is no way to get a handle on the statistics underlying these different scenarios because of the way the “science” of pharmacology has been corrupted. It isn’t mainly a top-down corruption enforced by a conspiracy; rather, it is a societal dysfunction (rather like liberalism) which is to some extent self-organizing and self-perpetuating. To really get a handle on this, read Pharmageddon.

[Updated to include over-prescription of antipsychotics (point 1) and tolerance withdrawal (point 4)]

Usurpalooza

The discussion of usury continues at the Orthosphere here and here.

Its the drugs, stupid

The Thinking Housewife takes up the question of psychotropic medications and violent behavior, with a list of school shootings (from Taki) by perpetrators on psychotropic drugs.

The usual question is raised: is it that violent people happen to be on psychiatric meds, or is it that psychiatric meds make people violent?

A commenter asked:

Are there any scientific or medical studies that show antidepressants, which are more like tranquilizers than stimulants, cause violent behavior?

Yes, there are. Here is a paper that surveys some of that large body of scientific evidence. (HT to commenter Vickie who saved me the trouble of collecting my own sources).

It has been decisively proven that these drugs actually cause violent and suicidal behavior: not just that people who are already suicidal and violent take them, but that the drugs actually make a significant number of patients violent and/or suicidal.

In addition, the “chemical imbalance” serotonin theory of depression has been completely discredited. Despite this it is still vigorously sold to the public by drug companies and the psychiatric profession.

Anyone who is on long-term medication — even for blood pressure — owes it to himself to read the book Pharmageddon by Dr. David Healy. Healy is not anti-drug, but he brings a scientific and clinical realism to the table that is sorely lacking in our pharmacomedical establishment.

I have some involuntary personal experience in this area. There are lots of things about prescription medications – especially their long term use – that most people do not know and about which most doctors are in denial. Just as a sampling:

The mechanism of action of most medications is unknown. When someone tells you that a medication “just” increases the neurotransmitter serotonin, for example, that is a sign that he doesn’t know what he is talking about.

Most medications – for any purpose – will exhibit a discontinuation syndrome (“withdrawal”) in some portion of the population after long term use.

Some portion of the population will go into “tolerance withdrawal” when on a medication long term. This means that you will start having withdrawal symptoms even though you have not discontinued the medication or reduced your dose. Your body has adapted to the presence of the medication, and now you are exhibiting withdrawal symptoms even though you haven’t withdrawn.

Most medical doctors would not recognize a withdrawal symptom if it beat them over the head repeatedly. Tolerance withdrawal isn’t even in their vocabulary.

Most doctors will not believe that the patient is experiencing withdrawal once enough metabolic “half lives” for the medication have gone by. The myth is that withdrawal syndromes last until you get the medication “out of your system”. The reality is that in some cases it takes years for your body to reach equilibrium.

The entire medical system takes a “see no evil, I’m not listening” approach to problems with medication. As a result, the great majority of medication-caused problems are attributed to some underlying illness rather than the medication. This means that as a systematic matter problems with prescription drugs are underreported by orders of magnitude. When your doctor tells you a prescription drug is “safe” he literally doesn’t know what he is talking about, because the way the system works now it isn’t possible for him to know what he is talking about.

The idea that patients with depression or bipolar disorder – or many non-psychiatric problems, for that matter – need to be on medications for life is very often a self-serving mythology propagated by drug companies. This mythology is perpetuated in many ways. One of those ways is that when the patient goes off the medication, he experiences a withdrawal syndrome that is attributed to a nonexistent underlying permanent illness. The idea that the transient problem for which the person was prescribed medication in the first place has passed, and that the medication is now the problem, is never taken seriously — even though it is often true.

The idea that these problems are limited to patients on psychiatric medications is a myth.

There are virtually no humane systems, clinics, or hospitals in existence that are capable of competently helping a patient come off of prescription medications safely. The last one I am aware of existing was one run by Dr. Ashton in the UK to help people get rid of benzodiazepines. It closed many years ago because she hit mandatory retirement, and she was doing a job that nobody else wants to do. Benzodiazepines are prescribed by doctors like candy, they are harder to get rid of than heroin, and if you seek medical help in trying to get rid of them you will most likely be categorized as either an addict or a mental patient and “treated” as such.

An unknown number of “addicts” started off by just doing exactly what their doctors told them to do and are not the sort of people to self-indulgently pursue a “high”. Their doctors got them addicted to one substance or another and then hung them out to dry (after they hit tolerance withdrawal, say); they self-medicate illegally and imprudently as a way, not of getting “high”, but of dealing with protracted withdrawal symptoms brought about by their doctors’ actions. Many of these end up dead either by overdose or suicide, never really understanding what happened to them.

I could go on and on.

Yeah, it was really bad

The Hobbit, that is.  Banal, incoherent, flashy in all the wrong ways.   Martin Freemen was very well cast as Bilbo (he is fantastic as Watson in Sherlock); and the Gollum riddle scene was fun if still a bit “off”.  But the great majority of it was just “when does this atrocious thing end?” bad.

By the way, since when did special effects become a way to make the real seem unreal rather than the other way around?  In Jurassic Park special effects brought dinosaurs to life.  In The Hobbit they make our live action characters live on like Wile E Coyote falling into a chasm and taking an anvil to the head over and over again after they could obviously not have survived what we visually see occur.

If you haven’t seen it, count your blessings and avoid it.

An argument that property taxes are intrinsically unjust

A comment by reader tz2026 got me thinking about taxation in the context of our discussions about usury.  I’ve long had an intuition that there was something not quite right about property taxes.  I’ve on occasion been known to suggest a “mandatory sale” rule: if the property tax assessor values a house at X the property owner should be able to say “OK, you now own it for X” and walk away with the money.

As a provisional exploratory matter, I now think I may be developing an argument that property taxes are intrinsically unjust.

In a profitable loan broadly and colloquially construed, the lender charges the borrower rent for the use of something.  In a case of usury the rent is charged for something which does not actually exist.  Thus usury is unjust: it is a scam, a theft, a something-for-nothing taking from the borrower.

Now the sovereign’s currency has credibility as a medium of exchange precisely because it is the currency that he will accept as payment for taxes.  We engage in all sorts of transactions in the sovereign’s currency.  (Contrary to the popular view, the sovereign’s currency is not mandatory for transactions: non-cash transactions are actually quite commonplace.  But that is something of an aside from the present subject, I think).  Usually – though not always – when a house is sold, it is sold for sovereign currency.

Anyway, the argument goes something like this:

Property taxes are denominated in the sovereign’s currency.  However, the value imputed for the property tax rests on the mere potentiality of selling the property for its assessed value.  There isn’t any actual sale transacted in actual dollars; there is merely a potential sale which does not in fact occur.

If it is intrinsically unjust to charge rent for something which doesn’t actually exist, it is also intrinsically unjust to tax what does not actually exist.

Thoughts?

Usury for dummies

Like many subjects, usury makes for some rather complex discussion.  At bottom though I think it is a simple enough concept.  In fact in the comments below I drafted a proposed Constitutional amendment that would wipe out legally sanctioned usury.  It took me eleven words:

No government or arbiter shall enforce deficiency judgements in any contract.

If you don’t like that one, here is an alternative:

All debt contracts in the United States shall be nonrecourse.

---

Note: This post used to contain a YouTube video which has since been removed.  Seeing the video was only peripherally related to understanding the point made here – in fact I’m not sure I even remember what video was here – but it did make the experience much more amusing, IIRC.  I think it was a Mitchell and Webb thing.

Potential for sale

We know on magisterial authority dating from the middle ages and from St. Thomas Aquinas that asset-recourse loans are not usury.

With an asset-recourse loan the lender buys an ownership stake in some specific asset (or business enterprise) from the borrower who owns the asset; a house, for example.  The borrower/owner gets the use of that asset, so it is licit for the lender to charge rent (interest) for the portion that he owns but the borrower is using.  If things go badly the asset can be sold to help the lender recover his original investment and any profits (rent) to which he is contractually entitled.  Once the asset is disposed of that is the end of it: the lender has no additional legal recourse,  and no moral entitlement in justice, to the borrower as a person.  The lender’s recourse for recovery of principal and interest is limited, legally and morally, to the specific assets named in the contract.

A lender who attempted to make an asset-recourse profitable loan against a bottle of wine or other item intended for consumption would be making a fundamental mistake.  The borrower/owner would take possession of the wine and drink it; the lender would – as both a moral and legal matter – have recourse only to the wine, which has been consumed, for recovery of principal and profitable interest.  However, a lender might make an asset-recourse loan against an item not intended for consumption – a non-recourse home equity loan against the borrower’s house, for example – and the borrower could use the proceeds for consumable items.  That is morally licit: the borrower is simply converting a portion of his non-consumable asset (the house) into a consumable asset (the wine).  Bottoms up.  If the borrower defaults, the lender can recover his principal and rent (interest) from the house.  After the house has been disposed of, the contract is ended.

Usurious lending is when there is no underlying asset, or when the contract permits recovery of more than just the specified collateral assets; but the lender charges rent (profitable interest) anyway.  The lender is literally charging rent for no-thing, for non-being, for something which does not exist.  Invoking “opportunity cost” does not solve the problem, because opportunity cost is not ontologically real.

Charging rent for nothing is contrary to justice.  Person-recourse loans are loans where the contract allows for a deficiency judgment: where the lender can go after the borrower himself to recover principal and profitable interest without reference to (or in addition to) some specific named real assets that the borrower/owner is renting back from the lender.  These loans are always formally usury, no matter how small or large the rate of interest.

What remains somewhat ambiguous in all of this is the concept of a real asset.

We have already covered the fact that opportunity costs are not ontologically real assets, so it is morally illicit to charge rent (interest) for “their” use.

Things that exist right now are real assets.  That house, that car, that corporation with all of its employees and customers and business operations and balance sheet items — these things are real assets, here and now.

But there is a kind of middle ground between actuality and nonexistence that Aristotleans call potentiality.  It is to potentiality and its relationship to usury that our attention now turns.

An opportunity cost is not real because it is a foregone opportunity: it is the road not taken, the one we don’t travel at all.  It is morally wrong to charge rent for imaginary things which don’t exist, and opportunity costs are by definition imaginary things which don’t exist.

But what about those things that lie several miles ahead on the road we do take?  What about a house I promise to build tomorrow?  Perhaps the materials lie in my warehouse, and the workers are scheduled.  Plans are made: the house is not real yet, but the potentialities are in place to bring it into existence.   Is it wrong for me to sell this potential house which does not yet exist?  What if I need the new owner’s money in order to complete the project?

I would suggest that it is not wrong to sell such a “house.”  But it is important to understand that what is being sold isn’t really (ontologically) a house: it is a business venture with plans to build a house, an inventory of materials, a cash account, contracts with workers, etc.  The house is not yet real: it is real only as a potentiality.  Every potentiality, though, rests in some actuality: the actuality that the buyer buys into is the business venture and all of its assets, including its various contracts.  The buyer literally cannot purchase “the house”: indeed, the words “the house” do not refer to something actual but only to something potential, something which does not yet exist.

Everything works out fine as long as nothing goes wrong.  Problems arise when things do go wrong though, and as usual this is where the rubber meets the road in questions of usury and related moral questions.

As Pope Benedict XIV reminds us in Vix Pervenit, many of those problems can be solved by specifying ahead of time exactly what real assets go to whom if the project cannot be completed.  The builder might pledge the materials bought with the buyer’s money: he might also put up some or all of his own equipment as security.  A great variety of arrangements are possible.  But the point is that recovery of invested money, penalties, etc should be spelled out ahead of time and tied to specific, actually real (not merely potentially real) assets.

So asset recourse always refers to actual, ontologically real assets, not to mere potentialities.

With that background we are equipped to discuss a number of interesting questions which have arisen.   These questions involve the relationship between time, potentiality, and actuality.

One of the medieval objections to usury is that it involves the selling of time.  This argument has been much maligned over the years, but in my view that is because it has been caricatured rather than addressed.  It is perfectly true that we can’t buy or sell time in itself: time in itself is entirely independent of our economic activities.  What can be bought and sold – after a fashion – is potentialities.  But potentialities are not time, and – this is the important part – to the extent that potentialities exist at all they exist in real things that do have real actuality right now.

So I propose that a just contract will always make reference either explicitly or implicitly to real, actual assets for its terms.  Every time-based contract has, if only implicitly, terms for what happens when things go right and terms for what happens when things go wrong.  These terms are not to attempt to indenture a person for any period of time in an attempt to capture potentialities: they must “cash out” only real assets in a breakup.

In support of this I will point out that one of the required terms in the Magisterium’s endorsement of asset-recourse loans is that

In the favor of the sellers [borrowers] it is added to the contract that in proportion as they have, in whole or in part, returned to the said buyers [lenders] the money just received, they are entirely quit and free of the obligation to pay the revenues and rents corresponding to the sum returned.

The corresponding term goes like this:

But the buyers [lenders], on the other hand, even though the said goods, houses, lands, fields, possessions, and inheritances might by the passage of time be reduced to utter destruction and desolation, would not be empowered to recover even in respect of the price paid.

So you can see the basic structure here: real assets are the basis for licit terms in any loan involving profitable interest.

That brings us to the Cookie Problem: is it morally licit for me to give you a cookie today in return for two cookies next week?  The cookie problem is not really a matter of usury, but it is closely enough related to be interesting, so to speak.

I think the answer is “kind of”.  It is morally licit for me to give you one cookie in order to “buy in” to your cookie-making operation.  As long as I own a share in your cookie making operation, it is licit, having agreed ahead of time, that you will supply me with cookies at some rate of production.  The first cookie is the rent you pay me for my share of the cookie operation; the second cookie is you buying me out.

But what happens if the pans get stolen and you can’t make cookies?  My only recourse to recover my original cookie is to whatever real assets of yours we agreed ahead of time to be part of the cookie making operation.  Maybe I am entitled to some or all of the ingredients in the cupboard.  I can be morally, justly entitled to real, actual things in our contract.  But I am not entitled to hound you forever to make me more cookies no matter what happened to the real assets I purchased a share in with my original cookie.